The US and China may be nudging closer towards finding some middle ground in their nearly year-long trade dispute, a resolution that would give markets some breathing space going forward and potentially even reverse some parts of the global economic slowdown.

President Trump indicated yesterday that he might extend the 1 March deadline for the two sides to reach an agreement if it seems that enough progress has been made in their bilateral talks and thus avert the planned introduction of yet more trade tariffs on Chinese goods. Chinese stock markets cheered with a 2% increase to a multi-month high in early trade and European markets followed with a rally, particularly in Germany where a lot of car producers and industrials depend on exports to China. In London, Rolls Royce and luxury brand Burberry were high up among the gainers, as were metals and mining companies.

Congress border deal boosts US stocks

The US government narrowly avoided a shutdown scheduled for this week thanks to a face-saving deal between President Trump and the Congress which allows both sides to claim success. Instead of the $5.7 billion worth of funding to finance the building of a wall on the US border with Mexico Congress agreed to provide $1.375 billion for border security, offering a way out of the impasse that has been paralysing US government offices since December.

The decision brought palpable relief to US markets and continued to boost Asian and European stocks this morning. The dollar’s reaction was mixed as it firmed slightly against the yen but nudged into weaker territory against the euro and sterling.

Brexit uncertainty continues

The pound is left without clear direction as Britain seems no closer to any clarity over Brexit. Sterling is almost flat against the dollar and marginally stronger against the euro but the strengthening seems more temporary than a clear trend.

The Prime Minister is due to present her updated Brexit proposal to the Commons today with changes from the EU on the Northern Ireland backstop and in theory this is due to be followed by a Valentine’s Day debate on the update. But comments from Brussels and the opposition are not providing much hope for a resolution.

CFD and forex trading are leveraged products and can result in losses that exceed your deposits. They may not be suitable for everyone. Ensure you fully understand the risks. From time to time, City Index Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material. As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD: Inverted hammer on daily chart highlights 50-day SMA, 38.2% Fibo.

EUR/USD takes the bids to 1.1050 during early Friday. The pair formed an ‘inverted hammer” candle while following the daily chart, which in turn favors the upside towards 1.1110/13 resistance-confluence.

EUR/USD News

GBP/USD: 3-week-old resistance-line questions 100-DMA breakout

Successful trading beyond 100-day simple moving average (DMA) fails to lend much strength to the GBP/USD pair as it struggles around 1.2520 during Friday morning. A rising trend-line since August-end, seems to challenge buyers.

GBP/USD News

USD/JPY: Bears eyeing break below 107.45

USD/JPY trades modestly flat, with the bias leaning to the downside, as we wind down into the close for the week following a data-heavy number of sessions which have left more questions unanswered and the outlook murky. 

USD/JPY News

Markets unmoved by Fed cut and pause

The Federal Reserve’s latest twist in monetary policy, reducing the fed funds for a second time in two months and then pausing for instructions has left markets without a clear direction on interest rates. Equites ended mixed.

Read more

Gold holds on to recovery gains amid trade/political pessimism

In addition to bouncing off multi-month-old rising trend-line, Gold gains support form recently downbeat trade/political headlines while taking the bids to $1,500 during Friday’s Asian session.

Gold News

Forex Majors

Cryptocurrencies

Signatures