Currency markets, which had been in a slumber in recent weeks, have come alive since last Friday.
While Sterling is broadly unchanged, with markets still focussed on a general election arguably too close to call, other major currencies have had diverging fortunes. The main driver has been a clear deterioration in US-China relations in the past 48 hours and the dwindling hope that the two sides will reach a trade deal by the 15th December deadline.
The Dollar has shed 0.3% and tellingly the S&P 500 is down 2.3% in the past three sessions to its weakest level since 6th November (at time of writing) while conversely the safe-haven Swiss Franc is up 1% to its strongest level since mid-November. Similarly, the Australian and Kiwi Dollars have made significant gains in trade-weighted terms of about 1%. Both currencies have appreciated markedly against the Chinese Renminbi and other Asian currencies and also against other developed market currencies. Even the dormant Euro is up 0.3% to its highest level in a month.
