• North Korea continues to be in focus keeping markets in risk off mode
  • Britain is reportedly ready to intensify Brexit talks with the EU
  • The RBA left its cash rate unchanged as expected

Tension in the Korean peninsula continued to be in focus yesterday as Trump and South Korea’s President Moon agreed to maximize pressure on the North while the US ambassador to the UN, Nikki Haley, called for the strongest possible sanctions against North Korea in the Security Council.
The comments spurred further demand for safe havens assets such as JPY and gold in an otherwise quiet session in markets with the US out for Labor Day.
In the UK, Brexit headlines suggested that PM May is ready to intensify Brexit talks with the EU and there was speculation around a potential ‘intervention’ speech from PM May later this month.
While GBPUSD has largely been led by EURUSD recently, more focus has fallen on EURGBP which has a new short term range of 0.9150-0.9250.
As widely expected, the Reserve Bank of Australia kept its cash rate unchanged at 1.50% this morning and gave little away in terms of new policy guidance.
The RBA continues to flag downside risks to economic activity from a stronger currency, which it also expects to keep price pressures subdued.
This morning, Barclays Research expects UK Services PMI to drop to 52.0 for August reflecting poor reported activity in the consumer facing sectors. If realized, it would reach its lowest level in a year.