The U.S. Dollar maintained familiar ranges, but sky-rocketed against Pound Sterling as it looks like their central bank will be dovish in its policy.
On the other hand, the buck halted its run against commodity-based currencies, which are jumping on the Chinese Yuan’s good fortunes as that currency hit its strongest level since July. All this comes as a result of positive anticipation in regard to a deal over trade with China that is hoped to be signed this Wednesday.
The will to de-escalate tensions between the world’s two largest economies is also translating in better performances for stocks across the globe. Geopolitically things look a bit calmer than they have in recent weeks, but the admitted man-made error by Iran in taking down a commercial flight outbound to Ukraine is putting heat on a beleaguered Iranian government. We shall see if inflationary figures tomorrow and Industrial Production at the end of the week make a dent to the buck.
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The Japanese Yen is at its weakest point since May of last year as the global outlook improves on trade expectations. Asian markets are climbing by over 1.0% while American ones try to cool off after reaching record highs, again, at the end of last week.
Technology and estimates of high profits in the banking sector are boosting the sense of risk-appetite that ultimately takes down a safe-haven steady asset like the Yen. Household Spending last week also did not help as it contracted (-2.0%), worse than forecast.
The Pound fell 2.1% from the start of the year to its weakest level in over three weeks and looks to fall further as the economy may merit help from the central bank. Bank of England officials joined the voices looking to cut interest rates down the line in order to prevent recessionary pressures to come from the Brexit process.
There is now a 50.0% chance the BOE will cut rates, which shall also rise after November monthly Gross Domestic Product numbers revealed a contraction of (-0.3%) when no expansion was expected.