FX Daily: Rare Earth Exports and Trade Tensions
China's rare earth export controls have become a key factor in determining risk appetite in the FX markets over the next four weeks.
The decision to impose export controls on rare earths has sparked concern in the US and among G7 nations, making it a highly debated topic in financial markets.
The ability or failure to negotiate away those controls will be one of the hottest topics for financial markets over the next four weeks.
According to the Global Head of Markets and Regional Head of Research for UK & CEE, the dollar has weakened slightly as short-dated US rates have reached their lowest point this year.
- Last night's release of the Fed's Beige Book suggests that the Fed will have sufficient evidence to cut rates by the end of the month.
- Betting markets expect the government shutdown to continue into November.
The current focus of financial markets is on US-China relations, with several key dates approaching.
Author's summary: Rare earth exports spark trade tensions.