WASHINGTON, D.C. – Major currencies started in the beginning Monday to a cautious watch as marketplace players wait whether the US and China will sign off to the longstanding trade bargain to end the war that’s been affecting the marketplace and the international financial increase.
Xinhua, an information bureau from China, reported Sunday that the 2 states are making constructive discussions about trade on Saturday, throughout a high speed mobile call. But it didn’t give any further details about the talk.
From its 108.235 amount point against the yen on Thursday, the dollar has gone up a bit and is currently trading at 108.75 yen as the hope for US-China trade deal coming through soon undercutting the yen.
The dollar is facing a resistance of about 109.00 with a moving average of 200 days. A breakthrough from its current amount level is expected to open the way to retest if it could top-up its 109.50 five-month high earlier this month.
On the other hand, the Euro gained positively from the increasing risk appetite of marketplace players. It bounced from its previous $1.0989 one-month low on Thursday to its current $1.10505 amount point against the dollar. It has also helped push the dollar index down to 97.980, close to its lower levels after all early in November.
According to a Senior Strategist at Daiwa Securities, Yukio Ishizuki, the currencies are most likely to be driven by headlines about the issues or concerns about the trade compliance between the US and China. Markets are waiting for some sort of updates, if not answers, about the trade deal soon, said Ishizuki.
The phase one of the trade compliance was originally set for last weekend. It was scheduled to be signed during the summit with Asian Pacific countries. However, Chile, the host nation for the summit, canceled the event because of ongoing domestic riots.
The long-standing trade war has affected the global manufacturing sector. The numbers for October reported by the Federal Reserve on Friday has gone down. There was a drop in the output at factories at about 0.6%, from September’s 0.5%, and the biggest dip after all May 2018.
Still, the hopes that the trade deal will be signed soon has kept the marketplace afloat, with the share costs in the US marketplace hitting new all-time highs on Friday.
On the other hand, the ongoing protests in Hong Kong are something that investors still have their sights on. The turmoil could hit the share costs in the country and other parts of Asia, like the Australian dollar dropping slightly to $0.6815.