US-China trade deal: Despite both sides agreeing on the Phase One trade deal on Friday, markets traded with caution, as they remained sceptical over the details of the deal that appear murky. Meanwhile, China announced over the weekend that it suspended additional tariffs on the US that were effective this Monday.
The US dollar traded mixed so far this Monday, weaker against the European currencies while a shade firmer vs. the Antipodeans. The Australian government’s downward revision to Australia’s growth forecasts outweighed upbeat Chinese activity numbers. The Aussie was capped below 0.6900 while USD/JPY hovered below 109.50 amid tepid risk sentiment.
Brexit optimism: Growing optimism over a speedy and soft Brexit boosted the recovery in GBP/USD from near 1.3320 to 1.3400. The Cable outperformed in Asia and remains strongly bid ahead of UK PMIs and PM Johnson’s address before the parliament. Meanwhile, EUR/USD consolidated around 1.1130 in the run up to the Markit Preliminary PMI reports.
Among related markets, Asian stocks traded mixed on concerns over trade deal details while Treasury yields advanced nearly 1%. Gold was little changed around $ 1475 while both crude benchmarks posted small losses.
Cryptocurrencies traded with mild losses, with Bitcoin trading around $7,050.
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