Brexit, NAFTA, US-Iran Tensions

Weekly Report - 17/09/2018

The calm before the storm


No one can argue that the greatest influence on the GBP at the moment is the Brexit. Investors probably expect more Brexit chatter and movement in the Pound through the week. NAFTA is in balance for now while the US President’s patience is likely to be running out. The U.S can just take out and kick Canada with tariffs to motivate the government into action. The Never-ending US-China trade war is still there but with hopes of talks to resume. The hopes will likely to be tested as Trump calls for tariffs on $200bn worth of Chinese goods to start ahead of any resumption of talks. The latest threat by the United States for strict action on countries who break the U.S sanctions on Iran could get things to heat up quickly in the week ahead. As for now, there is no immediate danger but as the November deadline is nearing, things could worsen quickly. We may Expect Europe to think to take Iran’s side as the EU trying to avoid U.S tariffs.

The Week that was

Bitcoin went down by just 0.36% last Tuesday, technically gave its 1.44% gains from Monday to close the day at $6,292.1. A Slow bullish start of the day saw Bitcoin hitting an intraday high $6,399.6 before reversing to the day’s high. Bitcoin came up against the first major resistance level at $6,396.13 to send the popular coin back from a move through to $6,400 levels for the first time since last Sunday. Elsewhere, the Kiwi Dollar was down about 0.13% to $0.6552 on Thursday giving up some of last Wednesday’s profits, the good news was that if China agrees to resume talks with the U.S. the pair could rise. On other news, China asked permission from the World Trade Organization to impose sanctions on the U.S according to the World Trade Organization meeting agenda. The Euro trading did not change much last week as we saw the popular currency was on the downside just below 1.1600 level as investors were awaiting last week’s ECB meeting on.


Main Focus This Week

Draghi’s speeches this week will be the most interesting news for EUR and will put the popular currency in focus. But will be surprising for the ECB President to talk it up following last week’s hawkish sentiment that he gave at his press conference. Now the JPY has a BoJ meeting on Wednesday and that alone will be very interesting to watch. The main focus will probably be on how the possible effects of trade tariffs will affect the Japanese economy. The Members need not appear to be meddling with the Yen to give easier trading terms as official trade talks begin with the U.S. A possibility of a talk that states the need to adjust its current range for 10-year bond yields and the effect of the recent Typhoon and earthquake will also be in focus. The recent stats have been impressive, but things could deteriorate rapidly. As for Turkey Rates hiked with vigor, but probably it will not make much difference as the U.S President is more than capable of kicking the Turkish Lira by just comment in social media platforms.


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