With the China-US trade dispute looking to drag on with no settlement in sight, the dollar remained on the defensive again the safe-haven Yen. Over the weekend Goldman Sachs cut its economic growth forecast for the U.S. Stating it was unlikely a trade deal would be made before the 2020 presidential election, with the risk of a recession increasing.
On the other side of the pond, the pound has sunk to depths not visited since 2016 at 126.29 GBP/JPY, having shed over eight yen in just over 2 weeks. The Telegraph reported Labour MPs had been told to cancel all travel in early September in anticipation of Jeremy Corbyn tabling a motion of no confidence.
Italy’s League Economics Chief: Party’s budget plan would raise public deficit target to 2.8% of GDP.
Germany’s IFO: Global economic outlook darkens amid escalating trade dispute.
The yen has gained on Monday, rising to its highest against the dollar in nearly a year and a half. Hedge funds are buying into JPY on concerns that a prolonged China-US trade dispute could tip the global economy into a recession.