Global sentiment
and risk appetite will be heavily influenced by the outcome of high-level trade
talks between the United States and China that began in Washington yesterday.
While there is a
growing sense of optimism over both sides securing a deal, a more realistic
outcome will be for an agreement to extend the 1 March deadline. Such a
development will open the doors to further negotiations down the road –
ultimately removing some element of uncertainty over trade, while also reducing
tensions. A return of risk appetite amid easing tensions will certainly be good
news for global equities and emerging markets but will signal bad luck for King
Dollar.
It has not been
the best of trading weeks for the Dollar, especially after minutes from
January’s FOMC meeting revealed that policymakers were unsure if rate hikes
were needed this year. The Dollar is clearly facing multiple headwinds in the
form of disappointing economic data and speculation over the Fed taking a long
pause on rate hikes this year. While the economic and central bank divergence
between the United States and everyone else seems to be supporting the Dollar,
the question is - for how long? The Dollar may lose its throne, as fears over
US growth slowing down sends investors to other safe-havens like the Japanese
Yen and Swiss Franc.
In the United
Kingdom, the Brexit saga has dragged on for too long and this fatigue is slowly
being reflected in the Pound’s valuation. This was a week filled by Brexit
noise, political drama in the UK and endless uncertainty. The pessimism over
Theresa May securing any deal with the EU was re-confirmed this morning, after an
EU official stated that “there will be no deal in the desert” at the summit in
Egypt next week. I believe the Pound could still be offered a lifeline amid the
chaos if the government extends Article 50 in an effort to prevent a no deal
outcome. Taking a look at the technical picture, bears are seen to be
re-entering the scene if a weekly close below the psychological 1.3000 level is
achieved.
Taking a peek
into the commodity markets, Gold is set to cap two consecutive weeks of gains
after briefly reaching its highest level since April 2018 earlier this week.
With US President Donald Trump set to meet China’s top trade negotiator, Vice
Premier Liu He, later today, investors are left hanging on the edge of their
seats just one week before the 1 March deadline. Any positive headlines of a
trade deal being struck between the world’s two largest economies may put
downward pressure on bullion prices. On the other hand, concerns about global
growth momentum may offer support for Gold. Recently, weaker-than-expected
economic data out of the US is starting to pose questions about the resilience
of the world’s largest economy, especially when set against the slowdown
evident in the EU and China.
In regards to
the technical perspective, the precious metal seems to be in the process of
creating a new higher low. The bullish trend on the daily charts remains valid
above the $1303 support level.
Have you heard this? Many Nigerian exporters have been defrauded of huge amount of money in the process of exporting commodities to foreign countries. Do you know why? They were not trained on export operations, management, documentations and the best methods of payment in export trade. This is terrible!!! Nigerians cannot continue to lose money to foreigners in the course of export business. Exporters, why don’t you get a practical manual that teaches the stages of export trade from processing and packaging of commodities to receipt of payment by the foreign buyers. It teaches export operations, export management, export documentations and methods of payment in export trade? It is a contemporary step-by-step guide to export trade. It tells all the contemporary dynamics in export trade. To get it, click on the link below:
http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
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