Optimism Lifts USD and GBP
Stocks in Asia gained as high-level U.S.-China trade talks progressed into a second day and optimism grew that a partial deal can be achieved for a temporary truce on tariffs. Treasury yields steadied after jumping overnight. President Donald Trump announced he would meet Chinese Vice Premier Liu He late on Friday. A currency pact to weaken the yuan remains high on the agenda. As a result, the US dollar had a bullish breakout since trade talks were going very well, “probably better than expected.”
Elsewhere, the pound touched the highest level in two weeks against the greenback after U.K. and Irish leaders said that there may be a possible “pathway” for a Brexit deal. One option mentioned in the media is for a free-trade agreement in Ireland. Another option is that Northern Ireland leaves the EU customs union with the rest of the UK but continues following EU rules, thus allowing an open border.
Major events for today:
0600 GMT: German CPI (Sep)
0930 GMT: ECB’s President Draghi Speech
1030 GMT: ECB’s De Guindos Speech
1230 GMT: USD Import and Export Price Index (Sep)
1230 GMT: CAD Employment Data (Sep)
1400 GMT: USD Michigan Consumer Sentiment (OCT)
NOTE: Traders are advised to be cautious and be updated on the major economic news causing high volatility to achieve better trading results.
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