On Monday, trading on world markets began on a positive note on the wave of the main news, which market players eagerly awaited, agreements between the USA and China on trade duties.
Following the meeting of the G-20 leaders in Argentina, D. Trump and Xi Jinping reached an agreement that the trade tariffs from the United States would remain at 10% and would not increase from the new year to 25%, while that China, in accordance with the agreement, will have to increase the volume of purchases of American goods, in particular, agricultural products.
Against the background of this news, Chinese stock indexes soared up on Monday morning, pulling up other financial markets in the Asia-Pacific region as well. Futures on US and European stock indices also traded with a significant increase, and the index of "fear" VIX at the time of this writing falls by 7.10%.
In the foreign exchange market, first of all, commodity and commodity currencies in tandem with the American dollar began trading gap up. The Australian and New Zealand dollars are noticeably added, which receive support in the wake of reducing tensions between Beijing and Washington, which gives hope to investors that the trade between China, on the one hand, and Australia and New Zealand, on the other, will not be reduced.
Evaluating the prospects of these agreements, the question arises, how long will they act and do they not look like just some temporary truce?
Yes, there really are such signs. Earlier this summer, after Trump's deafening threats to expand customs duties to 25% on trade with China to $ 200 billion, investors were noticeably worried, but then the American side decided to take a pause and increase duties by 10%, which somewhat calmed the markets. Now, a similar phenomenon is noted, which, in our opinion, is still very similar to the summer truce. How this will turn out in the future, of course, time will tell. In the meantime, the US dollar will remain under pressure locally, as the reduction of world tension on the wave adversely affects the demand for defensive assets and, above all, the dollar exchange rate.
In this situation, the expectation of a likely reduction in the rate of interest rate increases by the Fed outweighs the interest in the dollar as a safe haven, and the growth in demand for risky assets has traditionally in the last 10 years led to its weakening in relation to major currencies.
Observing optimism in the market, we can say that before the publication of data on employment in the United States, updated values of inflation indicators, as well as the Fed meeting at the end of this month, the dollar may remain under pressure.
Forecast of the day:
The AUD / USD currency pair is trading with a rise above the level of 0.7340 in the wake of the outcome of the negotiations between the US and China on trade duties. Fixing a pair above this level may lead to a local price increase to 0.7440.
The NZD / USD currency pair is trading with a rise above the level of 0.6865 against the background of the outcome of negotiations on trade duties between the US and China. Fixing a pair above this level may increase the price to 0.6940.
