Risk appetite returned to markets amid the news on Brexit and US-China trade relations. What is more, yesterday Donald Trump confirmed that the Islamic State leader Abu Bakr al-Baghdadi had been killed in a raid by the US. The only thing that could turn off risk sentiment is Argentina’s decision to limit the purchase of the US dollar. The US dollar index, which measures the greenback’s strength against a basket of six major currencies, kicked off the week with a rise of 0.01%, reaching the level of 97.84. The greenback grew amid the rising yields of US Treasuries. Against such a background, the dollar/yen pair advanced to a 1.5-week high but failed to consolidate at that level. Now it is locating near 108.75. Market participants are anticipating the meetings of the US Fed and the Bank of Japan. They have already priced in the Fed’s key rate cut by 25 basis points. Investors assume that the Japanese regulator will leave its interest rate unchanged. Additionally, traders strongly believe that soon the US and China will finally sign a trade deal, especially after the news on progress
in trade talks on the interim agreement. Even the Chinese authorities confirmed the progress in trade negotiations. Donald Trump stressed that the final deal would be concluded within 5 weeks. Nevertheless, risk appetite in the Asia-Pacific region is subdued. The AUD/USD pair is trapped in the same trading range just above the level of 0.6810. Today traders will be alert to the news on Brexit and the parliamentary vote on early elections on December 12 in the UK. Moreover, Mario Draghi, the former president of the European Central Bank, will give his farewell speech. Speculators are also awaiting clues about possible changes in the ECB’s monetary policy. That’s all for now! We wish you profitable deals. See you again on our channel within a couple of hours!