US/China tensions continue to escalate, as the US announces that no foreign made ‘chips’ (using US technology), will be supplied to Huawei. This follows the sanctions imposed on the Chinese Social media giants WeChat and TikTok. This failed to disrupt US equity markets, as the S&P rallied to all time record highs (following the Nasdaq), supported by the strong performance of the Tech companies. US Housing Starts and Building Permits both surged, lending to the ‘V-shaped’ recovery theory, by a leading sector.
The Safe Haven US Dollar continued to beat a retreat, with the EUR jumping to 1.1930, while the GBP spiked to 1.3235. The rising confidence has allowed the reserve currency to drift and troubled currencies to regain some mojo. The woes of the ‘second wave’ of the virus have impacted the trade exposed currencies, but the softer Dollar pushed the AUD back to 0.7230, while the NZD looks to regain 0.6600.
Trade tensions and the virus continue to operate as ‘interrupters’ to the economic recovery, although economic data is improving, from record pandemic lows.