The U.S. Dollar is trading in weak ranges to start the week as global markets improved their outlook following positive reports regarding trade deals and diplomatic successes.
Overview
Over a busy weekend, top negotiators from China and the U.S. explained that strong talks about contentious topics concluded in an agreed upon framework for making a trade deal. The betterment in the relationship follows weeks of tensions, but markets seem rejoiced with the good sentiment being exuded from an Asian trip by the U.S. President that included an Asian conference, deals with Malaysia and Cambodia, as well as a warm reception in Japan, where a new Prime Minister seemed to make a great impression. Xi Jinping, China’s leader, will be meeting President Trump in South Korea on Thursday.
Before the meeting, all eyes will be on the Federal Reserve as the FOMC announces its policy on Wednesday at 2PM, followed by a press conference where Jerome Powell will be questioned about the likelihood of more interest rate cuts. If “dovish,” expect the Buck to lose more ground. Markets will have plenty of volatility, with equities also impacted by earning reports from firms representing over a quarter of the S&P500 Index’s total value.
What to Watch This Week…
- FOMC & BOC Meetings on Wednesday
- ECB Meeting on Thursday
- Monex USA Online is always open
EUR ⇑
The Euro has a busy end to October with Confidence gauges, Gross Domestic Product readings from Q3, and the European Central Bank meeting all happening on Thursday. Recent data impressed as Manufacturing picked up steam while the Euro recovered some value after the political crisis in France subsided. With all attention on central bank monetary policy decisions, expect plenty of chances for wild swings especially if the arguments behind the decision surprise in tone and commitment. ECB President Christine Lagarde has demonstrated optimism in the Euro-zone’s resilience lately, we shall see if that changes.
CAD ⇑
The Canadian Dollar is trading mostly flat at the moment and remains weakened for the month, by over half of a percent, after major movements throughout October. The Bank of Canada will be meeting on Wednesday along with the Fed and is expected to keep slashing interest rates as the Canadian economy has been negatively impacted by changes in trade and lagging investment activity. August as well as the yearly Gross Domestic Product Average will be out on Friday, and it is forecast to avoid contraction.
