PRESIDENT XI JINPING STATEMENT BOOSTS GLOBAL MARKETS
The US dollar weakened today against the major currencies after yesterday’s developments in the Mueller probe. Yesterday, FBI officials raided and obtained documents from Trump’s personal attorney, Michael Cohen. The documents were part of the ongoing probe under Special Counsel Robert Mueller who is investigating the president on whether he colluded with Russian officials. They are also probing his conduct as the president. The search is an indication of the scope of Mueller’s probe. The documents seized might help bring an indictment to the president.
Global stocks today were up following a speech made by Xi Jinping, the president of China. In the speech, he touched on everything the Trump administration has talked about. He promised to open up the Chinese economy to American firms, remove tariffs and other barriers, and protect American innovation through Intellectual Property (IP). This speech is a follow up to another one made by Chinese premier, Le Ke Qian a few weeks ago who promised to implement these plans.
If China carries out their promises, it will ease tensions among investors. It will also be an indication that Trump’s tough talk and unconventional deal making process is working. This is because previous US administrations have attempted to solve the trade issue with China for decades. In all those negotiations, China has always promised to implement the policies but it never follows through. If it does this time around, it will be an added advantage for American firms who will be able to do business in the country freely.
The EUR/USD pair continued the trend started on Friday when the Labor department released the jobs numbers. Today’s fall of the dollar came as traders tried to interpret the goings on in Washington. The pair reached a multi-week high of 1.2350 and formed a Doji pattern, which is an indication that the pair may see a slight decline as bears make their entries. A confirmation of this is the MACD pattern which is pushing to the highest level since yesterday.
The CAD/JPY pair was significantly up today following the speech by Xi Jinping. The pair rose from a low of 84 and reached a high of 84.67. The fall in the Japanese Yen was widespread among major currencies as traders exited the currency, which is often a safe haven in times of tumult. The pair’s RSI is currently below 70, while the MACD is showing signs of weakness. As such, the pair could see a minor correction as bulls take profits.
After initially falling today, gold gained momentum and moved to a weekly high of $1340. This surge can be attributed to the weakening of the dollar because of the happenings in Washington. The pair is now trading comfortably above the important support price which is shown with the dotted line below. The upward momentum could continue if the dollar continues to weaken. Traders should now watch out for the $1350 level.