Daily Update – 27th November 2019
The U.S. dollar was slightly lower against a basket of currencies on Tuesday as traders looked to the latest developments in the U.S.-China trade talks for direction and the shortened holiday week kept currency moves muted. The United States and China are close to agreement on the first phase of a trade deal, U.S. President Donald Trump said on Tuesday, after top negotiators from the two countries spoke by telephone and agreed to keep working on remaining issues. The euro strengthened against the U.S. dollar on Tuesday, after U.S. President Donald Trump said the United States and China were close to agreeing on the first phase of a trade deal. Investor sentiment took heart in a steady patter of encouraging news about the prolonged trade talks, providing hope the on-again, off-again talks after 16 months of negotiations appeared to be drawing nearer to conclusion. Trump said Washington was in the “final throes” of work on a deal that would defuse the trade war with Beijing, but he also underscored Washington’s support for protesters in Hong Kong, a potential sore point with China. Sterling declined against dollar on Tuesday after a second opinion poll showed the Conservative Party’s lead is narrowing before the British election next month. Prime Minister Boris Johnson’s Conservatives have held an often double-digit lead over the opposition Labour Party in the polls for weeks. Hopes that a Johnson victory would end over three years of uncertainty over Brexit have lifted the pound, despite concern about any no-deal exit from the European Union. Major currencies hardly budged on Wednesday as traders looked ahead to the final outcome of U.S.-China trade talks and a shortened holiday week in the United States. It's a relatively quiet day ahead on the economic calendar. Key stats are limited to French jobseeker numbers that are unlikely to have a material impact on the EUR. Outside of the numbers, market risk sentiment will continue to provide direction. The big question is whether the U.S and China are any nearer to a finalized phase 1 agreement as talks drag on. There are no material stats due out of the UK to provide direction to the Pound. A lack of stats continues to leave the Pound in the hand of UK Politics, with opinion polls and predictions to provide direction throughout the day. It’s another busy day on the economic calendar from US. Key stats due out of the U.S include October durable goods orders and core durable goods orders. The FED’s preferred Core PCE Price Index figures are also due out along with 3rd estimate GDP numbers and personal spending figures. Barring dire numbers, the weekly jobless claims figures, pending home sales, and Chicago PMI will likely have a muted impact on the Greenback. Outside of the numbers, any further updates from Beijing and Washington on trade will also be key. Yesterday's Focus
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