Forex Today: Trade wars paint markets in red, Brexit looks worse, and central banks are limited

Here is what you need to know on Monday, August 26th:
– The US-Sino trade war is painting global markets in the red. The US dollar is losing some ground to major currencies as yields plunge, while it gains against commodity currencies. Gold is rising and oil is falling.
– Chinese Vice Premier and top negotiator Liu He called for calm and said foreign investors are welcome. He responded to President Donald Trump’s call to US companies to leave China. The escalation began on Friday when China detailed its counter-tariffs and Trump announced new levies after markets closed. Trump said he had second thoughts on the levies but the White House later clarified that he may regret not slapping more tariffs.
– The escalation overshadowed Fed Chair Jerome Powell’s speech, in which he opened the door to cutting rates again -but also said hinted that monetary policy cannot solve all the problems.  
– Brexit: The tone has worsened over the weekend. European Council President Donald Tusk said that UK prime minister Donald Tusk “would not like to be Mr. no-deal Brexit” – pushing the blame to the UK and saying there will be no “mini-deals.” Johnson hit back by saying that the responsibility lies with the EU and suggested that the UK will not pay the £39 billion divorce bill. Moreover, there are reports that Johnson is seeking legal advice on how to bypass parliament. UK traders are on holiday today.
– Cryptocurrencies have been on the rise, with Bitcoin settling above $10,000.
– Germany’s IFO Business Climate will likely show deteriorating sentiment in the euro zone’s largest economy.
– US Durable Goods Orders for July are expected to show moderation in investment growth.