US dollarMarkets are cautious regarding the US-Sino partial trade deal. The world’s largest economy agreed on a “hand-shake” agreement which is yet to be written. It includes a Chinese commitment to buy agrifoods.
The US will refrain from slapping new tariffs scheduled for Tuesday. However, levies set for mid-December are still on the cards. The safe-haven yen is recovering some of its losses and commodity currencies are on the back foot.
The dollar held near a 2-1/2-month high against the yen on Monday, while sterling dropped from a three-month peak on hopes for an orderly British exit from the European Union. The euro stood at $1.1025 versus the greenback, off Friday’s three-week high of $1.10625.
Investors might have to adjust for less volatile session ahead considering the absence of the US and Canadian traders. Though, a speech from the ECB policymaker Luis De Guindos and Eurozone Industrial Production numbers could offer intermediate trade opportunities.
It should also be noted that the speech from the BOE Sir Jon Cunliffe will also be looked after the latest comments from a policymaker raised questions on the central bank’s future performance.
While trade/political headlines will keep directing near-term moves and market sentiment, holidays in Japan, the US and Canada might restrict the market’s reaction to any fresh news.
Oil prices eased on Monday as scant details on the first phase of a trade deal between the United States and China undercut last week’s optimism over the thaw that helped to lift crude markets by 2%.
Gold prices inched up but were still below the $1,500 mark after the U.S. and China reached a “phase one” trade deal late last week, which saw the U.S. paused tariffs slated to hit imports of Chinese goods this week.