This week’s biggest news is the long-awaited signing of a trade deal between representatives of the United States and China. This event is scheduled for Wednesday. Although the deal is not by any means comprehensive and still leaves a lot to be desired, many hope that it will be the start of a round of more productive negotiations between the world’s two largest economies, and that there is hope for the trade war to end sooner rather than later.
Naturally, the upcoming deal has had a positive impact on the global financial markets. Riskier currencies such as the Chinese yuan and the New Zealand dollar have been recovering against the USD. Even currencies such as the Russian ruble and the Turkish lira, known for crashing dramatically versus the dollar in the past, are currently rallying.
The stocks and equities markets are also positive once again.
One notable loser amid the major currencies today is the British pound, which is weakening on worse-than-expected GDP data from the United Kingdom. There are serious fears of a recession in the UK, especially considering Brexit, so we might see the Bank of England finally take the plunge and lower interest rates soon.
Though the markets are no longer concerned that the United States and Iran might be going to war with each other, the trouble is not completely over. There are currently new protests starting in Iran, where the public has a recent history of rebellion against the political regime. With the assasination of Iran’s highest-ranking general two weeks ago by the US, it appears that now the fight against the Supreme Leader of Iran has been renewed. Donald Trump went out of his way to show his support for the protests on Twitter.
With the crisis averted for now, oil prices continue to drop. The WTI is down to $59.04, while Brent is trading around $64.94.
