The forex market to see some major spikes and surges as the news of economic slowdown from the United States hits the market which is resulting in the fall of USD and also the Euro which is falling and running record lows is said to go even further low.
There has been a rather muted start to what could be another crucial trading week. In the coming days, top officials from the US and China will meet in Washington to negotiate a potential trade deal. However, the tier-one data out of the US is joining the deterioration across other major economies is shaping sentiment once more. It also shows the importance of securing a deal is growing, to prevent sustained economic deterioration in the US. A global economic slowdown is accelerating and the trade dispute between the world’s two largest economies is a major factor. Prospects of an agreement between the US and China are still not great, even as President Trump has tried to talk them up in recent days. Friday’s mixed jobs report for the US may have not reflected the manufacturing sector slowdown leaking across the broader economy as had been feared (after the ISM data). However, traders will know that unless there is a deal between the US and China, it will only be a matter of time before it does. So traders are circumspect this morning. Add in another whistleblower to come forward in the President Trump impeachment story and there is further risk aversion for traders to factor in.
This is helping the performance of safer haven assets, with the yen and gold, supported today. On the Brexit front, there are dwindling prospects for a rehashed deal meaning there is renewed negative pressure creeping in for sterling again this morning.