The China US trade disagreement took a public turn over the weekend as US Vice President Mike Pence and Chinese President Xi Jingping took to the same stage to call the other side out. Before this point most of the disagreements had taken place behind closed doors with the threat of tariffs one of the more public series of events. However following the Asia-Pacific Economic Cooperation (APEC) summit over the weekend the two nations don’t look close to coming to a deal anytime soon, and the uncertainty surrounding trade remains.
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Of the other nations who also spoke at the summit most of them made reference to the uncertainty of global trade, with all nations aware of the potential consequences if there isn’t an eventual conclusion. The US dollar appears to have settled around the low to mid 1.28’s, and up until there is any positive news surrounding Brexit I feel that may remain the case.
The markets are currently monitoring US Federal Reserve activity, with Fed member’s speeches having the ability to cause volatility on global markets at present. Last week the Federal Reserve started producing a dovish opinion on the market. This continued yesterday when there was talk of inflation not accelerating as quickly as expected. If anything it seemed as though the Federal Reserve may have been starting to talk down the chance of continuing an aggressive rate hike plan in the future.
There is expected to be one next month however the turn of 2019 may bring a slow down to the policy and the rate may be held at 2.5%.
This could provide some respite for US dollar buyers as the rate may be driven into the 1.35’s against sterling, assuming the UK start to catch-up with a few hikes of their own. The Federal Reserve committee members are speaking throughout the week which means an update could be coming at any point. If you’re looking to trade US dollars make sure you’re speaking with your trader as the volatility on the Greenback appears to be increasing with so many events affecting global at present.
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