Market Participants look to Thursday’s US GDP from the US

Daily Currency Update

USD - United States DollarU.S. Consumer sentiment fell to a 7-month low in August on growing concerns surrounding a global slowdown, even as the domestic labor market data remains near record highs. The University of Michigan's preliminary confidence index slumped to 92.1 from July's 98.4, falling below all economist expectations. The director of the survey commented: "the main takeaway for consumers from the first cut in interest rates in a decade was to increase apprehension about a possible recession." Federal Reserve Chair Powell's speech was neutral as he did an excellent job of threading the needle between the hawks and the doves. A vital take away from Powell on behalf of the Fed was, "it will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion." A neutral speech wasn't enough to stop the market from continuing its selloff. The risk selloff only accelerated after Trump's tweet, where he criticized the Fed for not cutting rates sooner. Calling Federal Reserve Chairman Jerome Powell and China's President Xi enemies, he then and ordered American companies to start looking for alternatives to dealing with China. Late Friday, after the market close, he announced tariff increases from 25 percent to 30 percent on $250B of imports from October 1, and from 10 percent to 15 percent on remaining the $300B from September 1. U.S. equity markets closed around 3 percent down on Friday, with safe-haven currencies such as the Japanese Yen and Swiss Franc all rallying against E.M. currencies.