With the United States and Iran backing away from further military confrontation, traders will focus on the expected signing of a Phase 1 trade deal.
The U.S.-China Phase 1 trade deal is due to be signed at the White House on Wednesday. The trade agreement marks the first step toward ending a damaging 18-month trade dispute between the world’s two largest economies.
Although markets have yet to see the details of the agreement the main event of the week will be the signing of the Phase 1 trade deal. The Trump administration has invited at least 200 people to the White House for the ceremony. Chinese Vice Premier Liu He is visiting Washington in the upcoming week to sign the Phase One deal.
However, the 86-page Phase 1 agreement has not yet been made public. One known fact is that Washington has reserved the right to re‑impose tariffs if it judges China is not abiding by the deal.
The agreement covers intellectual property, technology transfer, agriculture, financial services, currency, and foreign exchange. Trump announced that “phase two” trade talks would start immediately.
START TRADINGForex – Phase 1 Trade deal to be finally signed
The imminent signing of a preliminary U.S.-China trade deal boosted sentiment. Currency markets elsewhere were quiet, with sterling the only big mover.
The US dollar was firm on the yen at 109.62 but faces tough resistance around 109.70 where rallies have repeatedly failed in the past couple of months.
Against a basket of currencies, the dollar was barely higher at 97.373, well within the recent trading range of 96.355 to 97.817.
The euro gained 0.06% to $1.1126, up from a $1.1083 low on Friday. Support comes in around $1.1060, while the recent peak at $1.1239 marks stiff resistance. Euro/dollar continued to tread water at $1.1129, unchanged on the day.
The Aussie hit a one-week high of $0.6919. The Australian dollar has been hurt by worries about the economic damage of the country’s ongoing bushfires.
The New Zealand dollar also climbed 0.2% to its strongest since Thursday at $.6650 and the euro EUR= was steady at $1.1128.
The Japanese yen weakened 0.1% to 109.60 per dollar, close to a seven-month low. A holiday in Japan reduced overall trading volumes. The dollar rallied 0.4% to 109.93 yen.
The pound dipped 0.24% to $1.3028 on fresh hints of a Bank of England rate cut, and weak growth and industrial production data.
Spot gold slipped 0.48% to $1,554.48 per ounce, having hit a seven-year top last week of $1,610.90 at the height of Iran-U.S. tensions.
Oil prices were slightly firmer after suffering the first weekly loss since late November. Brent crude futures were up 5 cents at $65.03 a barrel, while U.S. crude added 11 cents to $59.15 a barrel.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money