Over the weekend, President Trump expressed his hopes the US-China trade agreement could be signed at the Asia-Pacific Economic Cooperation meetings taking place in Chile in mid-November.
EUR/USD continues to move higher, as “positive” Brexit news aids the single currency. Incoming ECB President Christine Lagarde appeared on the CBS news program “60 Minutes” and stated that Europe is facing increasing fears of recession, as the manufacturing sector continues to have problems. She also mentioned that EU rates could still move further in the negative territory. “There’s a bottom to everything, but we’re not at the bottom at this point in time”. The Euro seems to have shrugged off these negative comments. ECB President Mario Draghi will hold his last ECB meeting this Thursday (October 24), and no changes in policy are expected at this time.
The British Pound has traded to its highest levels since the middle of May as the chances of Parliament approving the Brexit deal have improved. There are only 10 days left until the United Kingdom is set to leave the EU on October 31, and Parliament is still debating the deal PM Johnson agreed to last week with the EU. Parliament on Saturday voted to delay the UK exit until Jan. 31. Johnson sent the note on extension to the EU but left it unsigned. The contentious nature between Johnson and Parliament remains as the PM will attempt to put the deal to another vote later today, though it is not sure if the House of Commons will allow it. GBP/USD is now at the mercy of news regarding the deal and the vote. The EU is expected to grant any request for a delay and that would probably weigh on the GBP.
USD/JPY is trading in a quiet range as traders await news on Brexit. Any negative outcome could push traders back into “safe haven” purchases but at the moment that doesn’t seem the case.
The Canadian elections take place today and Liberal Party Prime Minister Justin Trudeau is in a close battle with Conservative Party candidate Andrew Scheer. Most analysts believe that the most likely result is that government will not be able to secure an outright majority. If Mr. Trudeau is re-elected, it may be difficult to enact legislature. Scheer seems to be a more progressive candidate and considers himself a friend to the oil industry. Based on the movement of the currency this morning, traders appear to expect a Trudeau defeat as the “Loonie” has strengthened against the USD.
According to Chinese VP Liu, substantial progress has been made in many fields and there has been an important foundation put together ahead of the signing of an agreement. He added that both China and the US can meet each other half way to achieve both sides’ common goals. It is expected that the US and China will sign the agreement at the AFEC meeting in Chile on November 16-17.