FXTM information and reviews
OctaFX information and reviews
XM information and reviews
FXCC information and reviews
FxPro information and reviews
HFM information and reviews

Trade Week Ahead - Shut It Down

21 January 2019

USD: I remain net short through DXY. However, there are a few events in the short term that could see a short bounce.

First is the government shutdown; which is showing no real sign of it being resolved any time soon. However, the reason for highlighting it from an FX point of view is there are several pieces of economic data that haven’t been released due to the institutions that provided the data being closed.

Retail Sales, Housing data and some other specific economic monthly data are currently backing logged due to the shutdown. The USD thus is trading free of this information – going on passed government shutdown this data will be released and released relatively quickly once the government is back up and running – the USD will have reposition on this missing market data.

The second is news that China may purchase large amounts of US exports in an effort to shrink the trade balance a part of a possible US-China Trade deal.

While a significant increase in export demand is a for any currency a positive, a China trade increase presents other FX challenges specific to the USD:

1. Chinese imports from third countries in the main are priced in USD. Thus, to find a USD positive China would need to see “recycling” flows.

2. Also, an easing trade conflict would be a boost for global sentiment, which would be a downside weight on the USD as EM currencies would jump up.

Thus continue to expect USD downside on the ‘pausing’ Fed and a slower growth profile having peaked in 2018. Will be monitoring the outcomes of the US-China trade negotiations closely on a short term basis.

GBP: As expected the Withdrawal Agreement was emphatically defeated last week, and as expected a ‘no confidence’ motion also failed, net GBP positive. Next steps are clearly underway: cross-party talks have begun, and possible solutions are being mooted that would find a majority in Parliament. The consensus is growing that Brexit will take a softer position, like that of a Norwegian-style EU position.

The second vote on the Withdrawal Agreement is early this week. It is likely to fail again however, the base case is an exit and one that is likely to be EU focus. The view is the GBP will appreciate on a net base over the coming months.

Share: Tweet this or Share on Facebook


XAU/USD retreats from multi-month top amid modest USD recovery, ahead of US GDP
XAU/USD retreats from multi-month top amid modest USD recovery, ahead of US GDP

Gold price pulls away from a fresh multi-month top amid a modest US Dollar strength. Bets for smaller rate hikes by Federal Reserve, recession fears should help limit losses...

26 Jan 2023

Microsoft: Still Trapped Within Descending Channel
Microsoft: Still Trapped Within Descending Channel

Microsoft Corp., an American multinational technology conglomerate currently ranked the third largest company by market capitalization ($1.728T) which actively engages...

24 Jan 2023

Same story new week
Same story new week

Chinese New Year celebrations – many centres are closed in Asia. Treasuries sagged to end on a bearish week. USDIndex at 101.30 low as the market continued...

23 Jan 2023

EUR is stuck consolidating
EUR is stuck consolidating

EURUSD is going to consolidate. The current quote is 1.0810. In the nearest future the EUR might experience some local pressure because the weather in Europe has changed...

20 Jan 2023

EURGBP Fails To Break 0.89
EURGBP Fails To Break 0.89

In today’s European session, Germany’s final CPI rate for December registered 8.6% on an annual basis, in line with market expectations and the previous value...

18 Jan 2023

XAUUSD: Weekly Review 16-20 January 2023
XAUUSD: Weekly Review 16-20 January 2023

Gold jumped to start 2023 with strong gains, as the positive momentum from December carried over into the new year. Last year’s headwinds, particularly the strengthening...

17 Jan 2023

Editors' Picks

FXCM information and reviews
ActivTrades information and reviews
RoboForex information and reviews
MultiBank Group information and reviews
MultiBank Group
Libertex information and reviews
Vantage information and reviews

© 2006-2023 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.