February 11-15. US-China negotiations, Shatdaun and Brexit


Each of these topics will have an impact on the strengthening of the dollar against other currencies. Trade agreements with China, as well as the meeting of the PRC-US leaders at the end of February, were in doubt.

The date March 1 was determined by the US president to renew the sanctions restrictions on Chinese imports. The dollar will start to grow if the delegation from the United States does not go to Beijing or the President of the United States imposes a ban on the use of telecommunications equipment from China, which will make any negotiations meaningless.

Another reason for strengthening the dollar will be the approach of a shatdaun – the financing of the interim budget ends on February 15, & nbsp; and there are no hints at removing the contradictions between Congress and the President.

The dynamics of the European currency and the pound sterling will determine the debate on Brexit. Teresa May does not expect a quick compromise, so she postponed the vote on secession from the EU at the end of February. The euro will be further suppressed discord between France and Germany.

President Macron refused to attend the Munich Conference. This is the fault of the position of Chancellor Angela Merkel in support of the construction of the Nord Stream-2 gas pipeline. & nbsp; Eastern European countries are against him on the side of France, with political assistance from the United States: they will be visited in a special tour by Secretary of State Michael Pompeo from February 11th to 15th. He can consolidate the position of opponents of the construction of Nord Stream 2 to the beginning of the Munich Conference on European Security.

This will weaken the position of European currencies.

February 4-8: rising oil prices and lull in Asian markets


From Monday, the exchanges and currencies of countries in the Asia-Pacific region will be without volumes – the Chinese New Year is coming, which will take the entire working week to celebrate. Hong Kong, Singapore, South Korea and New Zealand will join this event. Therefore, in the markets of Asian currencies will be a lull.

The focus will be on events in Venezuela. A special contact group of representatives from the EU and Latin America will join the attempts to solve the problem of dual power and avoid a civil war in this country next week.
These events will boost oil prices. Additional support for oil prices will be provided by the OPEC Summit, where the Charter will be discussed, allowing the cartel’s limitations to be extended to oil-producing states that are not part of it.

The Brexit theme, which had previously strengthened the pound, can now have a negative impact on it if Teresa May fails to meet with EU leaders within a week. “Brexit without a contract” is the worst option, but EU politicians publicly refuse to negotiate.

The following important events are expected in the USA:

  • China should respond to Donald Trump’s ultimatum to conclude a trade agreement before March 1;
  • the Fed should raise $ 52 billion from the market, which is one and a half times the usual amount of purchases;
  • Canada will decide on the extradition of the daughter of Huawei founder to the United States;
  • Trump will address the US Congress;
  • The former President’s lawyer will testify to the House Committee of Representatives committee in exchange for protection from prosecution.

    These events will contribute to the strengthening of the US dollar and pressure on European currencies, which together with the Brexit events are likely to significantly lower the British pound.

    Large movements of currencies, obviously, will be timed to the time of the release of the following news: meetings on the level of interest rates of the Central Bank of Great Britain, Australia, India, Brazil, as well as the publication of data on US GDP.

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Week from January 28: Brexit, Venezuela and the Shatdaun in the US


The trading week from January 28 will be determined by the following important events: the situation with Brexit and the state of affairs in the United States. The revolution in Venezuela will have an impact in perspective.

The dollar is likely to be under pressure on the background of the fact that the euro, pound and other major currencies may receive support as a result of the EU decision to extend the UK’s withdrawal from the EU.

This option has already been announced by several politicians: the German and Austrian Chancellors – Angela Merkel and Sebastian Kurtz, Brexit negotiator Michelle Barnier. The exit time will be transferred from March to May, subject to a clear and definite plan from the English Parliament.

Last week, his deputies took upon themselves the “Brexit burden”, removing Tereza May’s government from making decisions. The proposals of the factions will be submitted to the vote on January 29, various options are being considered, including the holding of a repeated national plebiscite, which does not exclude the return of the UK to the EU. Any decision is a positive factor for the pound because of clarifying the issue of “divorce from the European Union”.

The US dollar is in a different situation: due to the pursuit of Huawei and the requirement to monitor the observance of intellectual property rights of American companies in China, the arrival in Washington of a delegation from China on January 29-30 is no longer considered as positive news.

In addition, the fact that the White House’s request to the FBI and the CIA was leaked to the press, departments are asking to calculate the consequences of extending the shatdaun until April. The only thing that can level the negative is the adoption of a three-week budget. A compromise was proposed by Trump at the end of the week, in exchange for the consent of Congress to advance the construction of the border wall.

Oil traders should pay attention to the situation in Venezuela – the overthrow of Maduro can have long-term consequences, the country can quickly increase oil exports to 3 million barrels and review the terms of cooperation with OPEC.

From the number of publications of macroeconomic indicators, the strongest impact on currency fluctuations will be: the FOMC meeting on the level of the Fed rate, data on employment changes in the US (NFP), information on inflation in the Eurozone and the state of industrial production of China.

January 21-25, 2019


The movement of major currencies in the coming week will be determined by the following factors:

  1. The direction of the monetary policy of the Eurozone and Japan, which will be disclosed at a press conference following the meetings of the ECB and the Bank of Japan. Mario Draghi has already hinted at a “pigeon attitude” in an interview after speaking before the European Commission that this could weaken the euro in the near future. Haruhiko Kuroda is forced to find incentives for the development of the economy, the search may lead to unexpected statements from the mouth of the chief banker of Japan.
  2. The meeting of the Vice-Premier of the State Council of the People’s Republic of China Liu He with the President of the United States Donald Trump, who officially refused to go to the International Economic Forum in Davos. Statement on the visit of Liu He to Washington from the official representative of the Ministry of Commerce of China Gao Feng sounded before the appearance in the press of information about the investigation regarding Huawei. The US Department of Justice intends to accuse an IT company of technological espionage. To neutralize the resulting negative, Trump can cancel the increased duties on Chinese imports imposed during the trade wars.
  3. Shatdaun may be completed this week, the US State Department called all employees from the holidays, promising to pay salaries soon, which were frozen during the absence of the adopted annual federal budget.
  4. Theresa May’s new plan – the English Parliament ordered the Prime Minister to submit another document on Monday, in exchange for the conditions previously rejected by MPs for secession from the EU.
  5. Quarterly and annual reports of other large companies and statements by politicians, heads of corporations during the Davos forum.

A lot of news affecting the markets in the direction of growth of major currencies, and in the direction of their fall, can lead to unpredictable movements in the market. Therefore, it is not possible to make long-term forecasts for traders. It is recommended this week not to plan long-term positions for major currency pairs, as the likelihood of unexpected price changes is high.