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No Change in Major Currencies as Market Adopt Wait and See Attitude

No Change in Major Currencies as Market Adopt Wait and See Attitude

WORLDWIDE – The Asian market saw critical currency pairs remain steadfast as the week drew to a close. The uncertainty surrounding the US-China trade deal contributed to the standstill.

News broke that China invited US Treasury Secretary Steven Mnuchin, Trade Representative Robert Lighthizer, and other top trade officials to Beijing for another round of discussions. Reports of China’s move came on the heels of Reuters claiming there’s little chance a partial trade deal will be signed before the year ends.

Officials from both Beijing and Washington hinted heavily in early November that the two countries are close to finalizing a deal. However, comments made by US President Donald Trump last week quickly diminished hopes of that happening. According to Trump, he hasn’t agreed to roll back the existing tariffs on China.

The US Dollar (USD) index was trading at 97.835 by 05:05 GMT/1:05 ET. The currency is down by 0.04%. Both the NZD/USD and AUD/USD pairs traded 0.1% higher today. The GBP/USD was nearly flat at 1.2916. It’s bordering below $1.30 by the stable dollar and the still unforeseen result of the Dec. 12 elections. The USD/JPY pair is still at 108.62.

Meanwhile, the USD/CNY remains at 7.0343. The currency pair typically reacts quickly to trade news, so the lack of movement was surprising.

One analyst from ANZ Bank described the market as “treading water.” Ray Attrill, the Head of FX Strategy of National Australia Bank, said it’s due to headline fatigue. He explained to Reuters that the volley of contradicting comments and news has caused the market to stop second-guessing events and just wait. He said they’ll start trading once they know what’s happening.

Traders are also waiting on the flash purchasing managers’ index data. Prints from the Eurozone, Britain, Germany, and the United States are expected to arrive late on Friday. It will provide investors with a look into the status of the manufacturing industry.

CMC Markets’ chief market analyst Michael McCarthy says the narrative currently indicates that global growth is slowing as the year ends. Positive surprises on the upside will show real potential, though, and could directly affect the Euro-US dollar.

While currencies remain mostly steady, Asia and UK stocks are showing some optimism. Hong Kong stocks closed higher on the week’s last trading day.

The Hang Seng Index rose 0.5% to 26,595.08. It was one percent better than the previous week. Tencent Holdings was up by 1.3% while the AIA Group also rose by 0.8%.

UK shares also started Friday on a good note, with the FTSE 100 index rising 1/1% or by 82.65 points.

 

 

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