US Dollar And Euro Have No Support From EU-US Trade Talks

Market Reviews

Euro and US dollar stay weak, despite the fact, that the United States and the European Union agreed to start negotiations on tariff cuts, which alleviated fears of a deterioration in global trade tensions. Dollar is the weakest one for the week, followed by euro as the second weakest. The Japanese yen is lifted by renewed selloff in JGB, with 10 year JGB yield hitting as high as 0.098.

US indices closed with solid growth. DOW grew by 0.68% to 25414.10, resumed the rise from 23997.21 and broke 25402.83 resistance. S&P 500 increased by 0.91% to 2846.07. NASDAQ made another record close at 7932.24, up 1.17%.

After talks with European Commission President Jean-Claude Juncker, US President Donald Trump said that the two leaders are working to achieve the goal of "zero tariffs, barriers and zero subsidies on non-auto industrial goods." The European Commission leader added the US would hold off on further tariffs while trade negotiations were taking place. Experts hope this meeting will help stave off Trump’s plans for a 25% US tariff on imported cars and parts and start a process for US allies to begin reducing automotive tariffs. Trump’s softened stance on auto tariffs is a positive to Canada too.

Mexican and Canadian officials said Wednesday that talks on the North American Free Trade Agreement (NAFTA) will remain a three-way negotiation, despite suggestions by US President Donald Trump that he might pursue separate trade deals with both countries. "Canada very much believes in NAFTA as a trilateral agreement," Canadian Foreign Affairs Minister Chrystia Freeland stated.

The focus on the market is directed to the political decision of the European Central Bank, which is scheduled to be held later today. Since it is expected that the ECB will leave the policy unchanged, investors will study the comments of central bank president Mario Draghi in seeking any hints at the pace of normalization of monetary policy.