Whipsaw price action settles in favour of.....>

FOREX: Whipsaw price action settles in favour of high beta

-Tuesday was a particularly busy session across European and US trading hours,

as US President Trump set his sights on ECB's Draghi, criticising the Fed's lack

of action on policy while the ECB are free to talk up their policy toolkit,

weaken the currency and compete in US export markets. Firstly, Draghi dented the

EUR materially, talking up the possibility of using rate cuts to head off any

further weakness in the economic outlook. Trump fought back, accusing the ECB of

acting "unfairly" to influence currency markets. Once the dust settled, EUR

ended up at the bottom of the G10 pile, with high beta FX benefiting most

materially (AUD and NZD are markedly stronger).

-Offshore China FX soared on further commentary from Trump, who clarified that

he and Chinese President Xi will attend an 'extended meeting' at the G20 summit

on June 28/29, boosting expectations that the trade outlook could improve. CNH

had the best session in months in response.

-Attention turns to the critical Fed meeting Wednesday, with markets setting the

Fed a particularly high bar to avoid disappointment.