Richard Franulovich, head of FX strategy at Westpac, suggests that there’s no reasonable prospect of a lifting of trade uncertainty anytime soon as certainly there’s no deal that gives the appearance of Chinese concessions ahead of the PRC 70th anniversary celebrations in October, not to mention one that involves a rewriting of domestic laws regarding intellectual property.

“Persistent elevated uncertainty likely lends a continuing safe haven bid to the USD vs EM and dollar bloc currencies. Related to that, Fed policy, trade policy and the “strong” USD policy are all effectively at the mercy of an impulsive tweet, an environment hardly conducive to strong risk appetite. USD index likely to persist at upper end of recent ranges (97-99). Unilateral US FX intervention a continuing non-negligible risk. Beyond that, the broad sweep of US data still points to reasonable growth momentum, certainly more than the Eurozone.”