Over the last 12 months the ongoing trade war saga between the US and China has been a concern for the US, and global growth in general. The US believe that the current trade practices do not favour the US and leave them at a disadvantage. Therefore Donald Trump imposed $250bn worth of tariffs on Chinese goods and China fired back with tariffs on €110bn of US goods.
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This weekend US President Donald Trump and Chinese President XI Jinping at the G20 meeting in Argentina agreed a 90 day truce. Chinese officials have stated they are confident in implementing fair trade commitments which won’t lead to a trade war, however this story is far from over. In the upcoming weeks negotiations will be ongoing. If China back down to some of Trump's demands I expect they could get a deal over the line. However if China play hardball we could be back to square one. For more information in regards to how the trade wars may impact your US Dollar currency transfer feel free to contact your account manager.
An important week for the Pound v Dollar
This week UK Prime Minister Theresa May battles on in Parliament trying to persuade MPs to vote in favour of her Brexit deal. Yesterday she had a terrible day when MPs voted in favour that the Government should release the legal text that they have received, and if she fails to get a deal passed on the 11th, the Government then will have a say of what actually happens moving forward.
December 11th is a crucial day for the future of GBPUSD exchange rates. If a deal is reached this should eliminate some uncertainty and I would expect GBPUSD exchange rates to rise back above 1.30 and towards the mid 1.30s. However if Theresa May fails to get the deal over the line, I expect that her days are numbered, therefore the Pound could crash to the low 1.20 and even into the teens.
For more information in regards to Brexit and to be kept up to date as the events unfold, feel free to contact the trading floor.
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