US President, Donald Trump and the Chinese President, Xi Jinping, will meet today for the first time. The Chinese leader is already in Florida, expecting Trump. They will have dinner tonight and meetings will continue tomorrow, at the Mar-a-Lago resort.
Key notes
According to specialized media, tonight’s dinner will include first ladies, Defense Secretary, Commerce Secretary and State Secretary. On Friday, discussions about the economy and trade are likely to take place.
The meeting between both leaders will take place hours after North Korea fired a ballistic missile, on another test. The situation in North Korea is expected to be a talking point.
Thursday so far has been a busy day for Trump. He said that he is considering military action in Syria and at the US Congress, Republican senators changed rules, in order to pass Neil Gorsuch's nomination to the Supreme Court.
“One might expect the Trump/Xi meeting to provide calming sound-bites for the market, potentially supporting the US equity market”, said Greg Gibbs from Amplifying Global FX Capital.
Trump/Xi meeting should help boost confidence - AmpGFX
Trump considering military action in Syria after chemical attack - CNN
Implications for DXY
The currency market is having a week with limited volatility. The US dollar has been trending higher but with modest gains. The US Dollar Index remains near weekly highs, up less than 0.20% since the beginning of the week. US economic data supported the greenback. Over the next hours, besides the meeting between Trump and Xi Jinping, traders will pay attention to the US official employment report.
It is no clear so far what might come out of the meeting. Comments or leaks of the conversations and/or negotiations could have an impact on markets. What happens with the bond market could be the driver of the US dollar.
The DXY continues to test the 100.60 resistance area. A consolidation on top, could clear the way for a rally to the 101.00 zone and would confirm the current upside bias. On the opposite direction, a break of the 100.20 support area, would expose 100.00, increasing the odds of a more significant bearish correction.
About Donald J. Trump
He became the 45th President of the United States back on January 20. He released her fist budget proposal draft, with sharp increases in defense and homeland security spending and a significant reduction in funding for the Environmental Protection Agency, foreign aid and the Department of Agriculture. He failed at the first attempt to reform the Health Care system.
About Xi Jinping
He is the President of the People’s Republic of China since March 2013. He spoke at the World Economic Forum in Davos, two day’s before Trump’s inauguration, defending free trade and globalization.
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