EUR/USD near two-week high
EUR/USD extended Friday’s gains in early trading in Asia as the US dollar continued its weaker tone from Friday. The FX pair reached the highest in 1-1/2 weeks in morning trade, though trading activity was tempered somewhat by a public holiday in Australia. Adding impetus to the up-move, ratings agencies Moody’s and Fitch maintained Germany’s AAA rating with a stable outlook at the weekend.
EUR/USD Daily Chart
How long will the US government stay open?
While US President Trump signed the declaration to reopen the US government on Friday, it would only be for a period of 21 days and since the end of the shutdown, Trump has stressed that the agreement was “in no way a concession” and that 21-days goes very quickly. He also reminded everyone that he still has a “powerful alternative” (ie declaring a national emergency) but didn’t want to use it at this time, whereas another government shutdown is certainly an option.
China Premier Li upbeat on economy
Li reportedly commented that the Chinese economy has enough resilience, potential and ample room for growth, and is confident and capable of keeping economic growth within an appropriate range despite multiple risks and challenges in 2019, according to Xinhua news. He promised to further streamline administration, strengthen regulation, reduce taxes and fees on a larger scale (does he mean tariffs?) while assuring that China would strictly protect intellectual property rights (one of the major stumbling blocks in current negotiations).
Driven by a weaker US dollar, the upbeat comments above from Premier Li and hopes for progress at this week’s US-China trade negotiations, USD/CNH fell to the lowest level since July and dropped below the 200-day moving average for the first time since June 19.
USD/CNH Daily Chart
Huge Week Ahead- Tech Earnings, Brexit Amendment Vote, FOMC, Trade Talks, and NFP
Central bank speakers
There’s not much on the data front to excite today. Euro-zone M3 money supply and private loans for December are due, along with the US Chicago Fed activity index for December and the Dallas Fed manufacturing index for this month. On the speaker front, we have central bank governors Draghi and Carney on tap. The US holds auction for 2- and 5-year debt.
The full MarketPulse data calendar can be viewed at https://www.marketpulse.com/economic-events/
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