Psychology for major markets Jul 15
USD generally steady despite tariff annoucnements, JPY remains weak
EUR/USD – EUR/USD initially dipped after the Trump announcement of a 30% tariff on the EUR, but soon bounced and is little changed just below 1.17. Higher tariffs were seen as USD negative in April and are now likely neutral for EUR/USD given higher levels.
USD/JPY – JPY still under pressure as equity markets prove resilient to tariff announcements and Japanese Upper House elections create some fiscal concerns.
EUR/GBP – Testing 0.87 with UK growth sentiment weakening and expectations of tax increases in the autumn rise leading to rising rate cut expectations.
AUD/USD – Found good support below 0.64 and retains scope for gains above 0.66 after RBA refrains from a further rate cut at this stage.
Equities – S&P futures making new all time highs, but valuation is very expensive and market looks vulnerable if latest tariff announcement is taken seriously.