03.12.2019: Trump visits London: trade deal US-China is not to be reached soon

Global trade became the main topic of the day. Traders are focused on the events in this field. The EUR/USD pair consolidated on the previously reached levels near 1,1080. Yesterday, new President of the European Central Bank Christine Lagarde said that the regulator was planning to reconsider its monetary policy and shift to a symmetrical inflation target. At the same time, the ECB President did not show any signs of the monetary policy easing that boosted demand for the euro. However, the risk appetite is also an important factor. The US dollar as a safe-haven currency can win back some losses. European stock indices are nosediving after another shocking speech of Donald Trump. During his visit to London, the US president said that a trade deal between Washington and Beijing will be reached closer to the 2020 presidential elections. Now, markets are ready to another stage of escalation as new tariffs on the Chinese goods are coming. At the same time, Beijing is going to introduce sanctions against some US companies as a response to the White House. However, the GBP/USD pair is moving upwards due to completely different reasons. The pair hit the 6-week high reaching the key psychological level of 1.30. GBP/USD left the consolidation range of the Asian session and now we are waiting for a bullish breakthrough of the 2-month downward channel. Traders’ appetite to the British pound was
contributed to the results of the latest survey. It showed that voters’ support of the conservative party of Prime Minister Boris Johnson rose to 44%, and now the gap between two parties has widened to 12%. Markets suppose that the confident victory of the Tory party will reduce uncertainty around Brexit that, in its turn, supports the British pound. Also, the British currency is boosted by low demand for the US dollar provoked by escalation of the global trade uncertainty as well as
weak data on the US manufacturing PMI. Today, the US retail sales report and the ISM New York current business conditions index will be issued. We continue to keep close tabs on market developments! Stay tuned!

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