The U.S. Dollar remains in weakened ranges following a weekend when all the focus was on digesting the latest developments on U.S.-China trade resolutions.
Overview
The U.S. Dollar remains in weakened ranges following a weekend when all the focus was on digesting the latest developments on U.S.-China trade resolutions. Although many details need to be released, it seems that the U.S. will start reducing tariffs while Chinese officials agree to establish more volume in agricultural purchases. Optimism caused a surge to commodity markets, whose positive impact translated into a revival for various currencies across the board, many such as the Australian Dollar and Euro seeing their strongest levels since August.
While the buck concedes plenty of ground to most, the exception was an appreciation against the Japanese Yen, which is now trading around its weakest ranges since May. We shall see other major data out of the Euro-zone and the United Kingdom this week, inflation on Wednesday and ultimately Gross Domestic Product domestically on Friday. Their releases will be the last major data risks of the year as we enter holidays.
What to Watch Today…
- No major events scheduled for today.
Complete Economic Calendar can be found here.
EUR
The Euro rose last week following a return to optimism with a new face running the European Central Bank and mixed indicators reducing fears of recessionary pressures around the bloc’s larger economies. Unfortunately, while news trade-wise improved between the U.S. and China, tensions seem to be growing between Germany and China officials who threatened retaliation if the largest EU economy blacklists Huawei Technologies Co. and denies the firm participation in bids for the 5G network project the continent is working on. Regardless, the currency is experiencing a wave of appreciation, cutting back on losses experienced since the start of the year.
GBP
The Pound is trying to reach its highest point of the year as it climbed by over 2.0% since general elections took place on Thursday that handed a mandate to Boris Johnson and his Conservative Tory government. His administration says that it plans to leave the European Union officially by the January 31st deadline, end austerity measures, and spend on major projects.
Additionally, the new cabinet plans to decide on a replacement to Bank of England’s governor Mark Carney who shall speak on Thursday at the last policy meeting of 2019. We see these ranges staying put until the end of next month when all eyes will be on a deal that cuts off the U.K. but begins a trade renegotiation process. The hardest parts to achieve are yet to come.
