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Cancelled tariffs cause leap for peso in forex markets

Mexican Peso NotesMinor currencies were at the forefront of the trading world on Monday after the Mexican peso leapt in value.

At one stage, the currency went up by almost 2% against the US dollar – a significant change, and an unusually high amount in the forex markets.

This was due to the decision by US President Donald Trump to cancel proposed sanctions on the country’s exports. He had previously threatened to add 5% to all items brought in from the country.

Elsewhere, the dollar did manage to surge, especially in the USD/JPY pair, where it rose by a fifth of a percentage point and reached 108.425 yen.

The dollar index, which tracks the currency compared to six other major currencies, rose overall by a similar amount. It reached 96.716, which was a boost on last week’s performance.

The Australian dollar went down a little to $0.6995 in the AUD/USD pair, which was a significant reversal compared to last week.

The euro also went down, this time by 0.1% against the US dollar – reaching $1.1318.

Now that a new forex trading week is underway, there’s plenty for traders to keep their eyes peeled for.

Monday there will be a number of major economies that will close their banks for holidays. Whit Monday means that economies in France, Germany and Switzerland will close, while the Queen’s Birthday will shut institutions in Australia.

This afternoon there will see some construction information from Canada. Housing starts information for May will be out at 12.15pm GMT, while building permits information for May will be out at 12.30pm GMT.

A speech from Michael Saunders, who sits on the Monetary Policy Committee of the Bank of England, will occur at 5pm GMT.

Tomorrow, British average earnings information for April will be out at 8.30am GMT. This is expected to show a rise from 3.2% to 3.4%.

The US producer price index for May, excluding food and energy, will be revealed at 12.30pm GMT. This is predicted to show a month on month change from 0.1% to 0.2%.

A speech from Christopher Kent, who is Assistant Governor (Economic) at the Reserve Bank of Australia, will occur at 11.25pm GMT.

Looking ahead to Wednesday, Westpac consumer confidence data for June is due out at 12.30am GMT. This was last recorded at 0.6%.

The Chinese consumer price index for May is due out at 1.30am GMT and is expected to show a year on year rise from 2.5% to 2.7%.

Several central banker speeches are scheduled to occur on Wednesday morning. Mario Draghi, President of the European Central Bank, will speak at 8.15am GMT. While Luis De Guindos, Vice President of the ECB, will speak at 9am GMT. Following this, Luci Ellis, Assistant Governor (Economic) for the Reserve Bank of Australia, will speak at 9am GMT.

Traders should also watch out for the US consumer price index release, excluding food and energy, which is released by the US Department of Labor Statistics at 12.30pm GMT.

Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.


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