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Currency Market Analysis

Feb 26, 2019 | Currency Market Analysis

Global Themes

Greenback slips to three-week lows on trade truce

The USD slipped further yesterday as markets reacted positively to news the US and China’s trade talks have been extended beyond the 1 March deadline.

US President Donald Trump announced yesterday that he would suspend the scheduled increase in a number of tariffs after the weekend’s negotiations between the US and China saw good progress.

Asian markets were the best performers – with the Shanghai Composite up an incredible 5.6%.

Pound higher

The British pound was higher on hopes that a delay to next month’s Brexit date means that there is less chance of a problematic “no deal” Brexit.

The AUD and NZD were both higher as markets reacted to the positive trade news.

Fed speak

The focus tonight will be on the US Federal Reserve chair Jerome Powell who presents his semi-annual testimony to Congress.

The market will be looking for signs Fed remains comfortable with the current state of policy.

The markets will also want to hear details about the eventual end of the Fed’s balance sheet reduction program.

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