All eyes are turning to the Federal Reserve and the US dollar. How to trade XAU/USD, EUR/USD, and GBP/USD?
UK pound rallies due to Irish border deal
On Monday, the UK currency managed to rally following news that the United Kingdom is on the verge of compromising on the Irish border issue with the aim of moving forward with a Brexit deal.
The currency pair GBP/USD tacked on by 0.28% ending up with 1.3066, which is not far from an earlier maximum of 1.3078.
British Prime Minister Theresa May intends to make another Brexit deal with the European bloc, as Bloomberg informed. As a senior UK government official revealed to Bloomberg, Britain seeks ways to come to a compromise on the border issue.
The compromise would be a last resort if a compromise isn’t reached and it would be conditional on Great Britain having complete access to the EU customs union. By the way, the European Union has already offered to permit Northern Ireland to trade with Ireland without full checks that May has rejected telling that it would heavily impact Great Britain.
Besides this, the USD index, normally estimating the greenback’s purchasing potential against a number of its key counterparts declined by 0.05% hitting 94.75 because trade tensions weakened and market participants shifted to riskier assets.
On Sunday, Canada and the United States managed to reach a trade deal on the North American Free Trade Agreement, several hours before the deadline.
By the way, the deal acquired a new name - the United States-Mexico-Canada Agreement. The given pact will give America access to Canadian dairy market and will also cap Canada's car exports to America.
As for the Canadian dollar, it hit a four-month maximum. The currency pair USD/CAD slumped by 0.76% being worth 1.2812.
The common currency went down because investors were still cautious after Italy's government announced a budget deficit, which defied Brussels. Moreover, the European Commission is anticipated to reject Italy’s budget initiatives.
The currency pair EUR/USD slumped by 0.02% trading at 1.1602.
Commodities (iron ore, oil) and commodity-linked currencies (AUD, CAD) surged. West Texas Intermediate has reached $75 a barrel, while Brent rose to the highest mark since October 2018.
Although Jerome Powell’s speech sounded hawkish on Wednesday, September 22, markets did not get scared and the main stock indices got bought back…
Turkey’s central bank governor was at a crossroads: to hold interest rates and take a risk to be fired like it was for three governors before him, or to comply with the president, to cut rates, and to risk the market. Let’s find out, how to react to the rate cut.