European morning session was fairly subdued...>

FOREX: European morning session was fairly subdued in anticipation of Powell's

Jackson Hole speech. However, the market started to move initially on China

announcing that it would retaliate against US tariffs. Powell's speech did

little to move the docket more before markets turned attention to the potential

for a US response to the Chinese comments.

- The USD was seen easing ahead of the 1600BST fix before it was given an added

shove lower as markets reacted to Tweeted Trump comments that he would be

responding to China tariffs later on. USD/JPY, which had seen a high of Y116.74

ahead of Fed Powell, dropped to Y105.55 on comments, eventually grinding its way

to Y105.29. EUR/USD spiked to $1.1148, having failed in two attempts earlier to

make an impression on reported support into $1.1050(E3.19bln of EUR puts roll

off between $1.1050-20 Monday). Cable extended its recent recovery to $1.2280

but sellers were lined up here which  ahead of the long UK weekend and G7 which

capped advance.

- Markets await Trump's retaliatory action.