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.
The dollar has slightly weakened as short-dated US rates have reached their lowest point this year. The Fed's Beige Book suggests that the Fed may cut rates by the end of the month, despite the government shutdown.
Betting markets predict that the government shutdown will continue into November, with US-China relations being a major focus ahead of key dates.
Author's summary: Rare earth exports spark trade tensions.
- Key dates ahead for US-China relations
- Fed may cut rates despite government shutdown
- Dollar slightly weaker as US rates reach lows