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

Feed news

Latest Forex Analysis

Editors’ Picks

EUR/USD: it's all about the Fed

The greenback closed the week on a high note, as data released Friday topped the market's consensus, suggesting that the US economy remains in good shape, and therefore the US Federal Reserve won't need to take a dovish turn.


GBP/USD recovers to 1.2600 as UK politics become clearer

While overall US Dollar (USD) strength continues to dominate market sentiment, the GBP/USD pair recovers to near 1.2600 as an outcome of the UK PM’s race becomes clearer during early Monday.


USD/JPY: Tokyo open welcomes risk-on amid quiet trading

The USD/JPY pair trades little positive to 108.60 by the time Tokyo markets open on Monday. Lack of major negative news triggered a market move against the US Dollar.


Trade War With India Starts: How Trump is Winning the Global War in 10 Tweets

After a year of talks on U.S. barriers to Indian steel and aluminum, India retaliates against Trump. The Hindu reports India to Impose Retaliatory Tariffs on 29 U.S. Goods Starting June 16. 

Read more

Gold: Signs of bullish exhaustion ahead of the Fed

Gold's rally seems to have run its course with signs of bullish exhaustion emerging on technical charts ahead of Wednesday's FOMC (Federal Open Market Committee) rate decision. Gold is currently trading at $1,339.

Gold News