It has been reported that the US and China have agreed to a makeshift truce in their ongoing trade war. Details of the agreement would scrap plans for an increase in tariffs on an additional $300bn of Chinese goods according to reports from the Chinese press.
|Currency Pair||% Change (Month)||Difference on £200,000|
Donald Trump and Chinese President, Xi Jinping are scheduled for a meeting tomorrow provided Trump agrees to the truce. Earlier in the week Trump had stated a trade deal was a possibility but did warn that he is prepared to impose further tariffs on Chinese imports if there was no progress in talks. If a deal is to be agreed this could result in further US dollar strength and it may even extend to some commodity based currencies such as the Australian dollar.
For those holding out for a sterling rally against the dollar perhaps this is not the update which they wanted. It is quite possible that the pound will continue to remain fragile due to the current political situation in the UK and the lack of clarity surrounding Brexit. Boris has said it is his intention to bring a no deal scenario back to the table in order to negotiate a better deal with Brussels, which could lead to increased uncertainty and therefore sterling weakness.
Today we will see the release of personal consumption expenditures. Year on Year data is set to remain unchanged at 1.6% and month on month is also set to remain unchanged at 0.2%. If there is a significant move away from expectation we could see some movement on the market.
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