USD

As the trade talks continue, there was a phone conversation held between US and China on Saturday morning. The Chinese Ministry of Finance termed the call “constructive”, as each side stated their concerns about the Phase One Trade deal. However, there is no indication as to when the trade deal will be signed. As news regarding these negotiations continue to be optimistic, there has been a positive reaction for both the USD and US equity markets.

EUR

EUR/USD trading higher overnight in response to the positive trade talks. There is expected to be pressure on the EUR as we head towards PMI and ECB minutes later this week. A number of ECB members will be speaking today and the new ECB President will speak later this week. 

GBP

GBP/USD continues to move higher as the latest opinion polls out of the UK show the Conservative Party has increased their lead against the Labor Party as we move closer to the UK elections on December 12th. Prime Minister Boris Johnson and Labor Party leader Corbyn are expected to speak at the Confederation of British Industry’s conference today.

JPY

Traders’ optimism over US-China trade talks has eliminated the safe haven trade for the time being. The fragile nature of these talks has the JPY trading based on the latest news. Volatility will remain as long as these negotiations continue. These negotiations continue to have a strong impact on the USD/JPY more so than the economic numbers released from Japan.

CAD

The Canadian Dollar is higher this morning as oil prices improve with traders waiting for any new information on US-China trade talks. The big rally in oil on Friday is being attributed to optimism that the trade deal will happen sooner than later. OPEC will meet on December 5th and 6th in Vienna to discuss production.

CNY

China announced over the weekend that they are cutting key interest rates for the first time since 2015. The PBoC cut the 7-day repo rate by 5 bps to 2.50%. Traders are now looking to see if this move is the precursor to further stimulus measures in China.