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Last week recap
Last week recap
United States Dollar
Trump has tweeted that high-level trade talks last week between the US & China are “going well”, but any deal will not be finalised until both he and President Xi meet. Trump reiterated that both sides are working to reach a deal before 1 March when US tariffs on Chinese goods are set to increase to 25%.
The United States government has officially sent Canada an extradition request for Meng Wanzhou, the Huawei CFO at the center of an indictment that alleges a conspiracy to violate U.S. sanctions against Iran by doing business through a hidden subsidiary. Canada’s Department of Justice confirmed on Monday night that officials had received a formal request for Meng’s extradition from the U.S.
A dovish US Fed, which is holding rates steady and signaling that it has moved into a neutral stance on further interest rate adjustments triggered an extra rally in the Loonie. Before that, the Loonie was already in a rally mode when crude oil WTI was trading to intraday highs.
With the US and China remaining locked in a trade war, European and Japanese consumers have begun reaping the benefits of their new bilateral trade deal. The pact sweeps away almost all tariffs between the economies representing close to 30% of global gross domestic product. The deal dubbed ‘Cars for Cheese’ because of the opportunities for Japanese car markets and EU farmers, means European exporters alone will save about €1bn in duties a year.
Sterling held steadily above 1.30 against the USD after the House of Commons backed Theresa May’s bid to return to Brussel’s to re-open Brexit negotiations. Donald Tusk responded to the vote by stating the agreement was not open for re-negotiation. All eyes will now turn to the EU as the question now becomes what is achievable in new negotiations.
The Australian Dollar edged lower through trade on the public holiday Monday as risk appetite turned negative and investors sold into rallies approaching 0.72. While the markets largely expected the Fed to leave rates on hold the exceedingly dovish undertone forced a sharp correction in the world’s base currency fostering and AUD rally.
New Zealand Dollar
The New Zealand Dollar had little to digest on the economic calendar and took its cues from off-shore forces. Initially in the session the Kiwi did manage to trade higher after the spill-over effects of a decent Australian unemployment rate release supported the NZD.
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