By Dan Bell
The NZDUSD opens at 0.6919 (mid-rate) this morning.
“Risk on,” the NZD has gapped higher on the open buoyed by the news that President Trump has agreed that on January 1, 2019, he will leave the tariffs on $200 billion worth of product at the 10% rate, and not raise it to 25% at this time. Trump met with Chinese President Xi Jinping at the G-20 summit in Argentina with both parties agreeing to continue to work together in an effort to have a new trade agreement in place within the next 90-days.
According to the White House statement “China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries. China has agreed to start purchasing agricultural product from our farmers immediately.”
President Trump has also put the heat on Congress to approve the new trade deal with Canada and Mexico by announcing that he intends to terminate the original North American Free Trade Agreement. Trump made the announcement to media on his way back from the G20 summit leaving Congress with to approve the new United States-Mexico-Canada Agreement, or face risking having no trade deal in place.
The UK Labour party are set to seek a vote of no confidence in Theresa May’s government if she loses the key Commons vote on the 11th Dec. Sir Keir Starmer, the shadow Brexit Secretary, said his party will “inevitably” table a no confidence motion if Mrs May’s Brexit deal does not pass through Parliament. As it stands all opposition parties, Northern Ireland’s Democratic Unionist Party and about 90 members of her own Conservative Party are saying they reject the proposal.
Global equity market closed out the month mixed, – Dow +0.79%, S&P 500 +0.81%, FTSE -0.83%, DAX -0.36%, CAC -0.05%, Nikkei +0.40%, Shanghai +0.81%.
Gold prices edged lower Friday, down 0.2% closing out the week at $1,221 an ounce. WTI Crude Oil prices slipped lower on Friday, down 1.5% and trading at $51.09 a barrel.
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Dan Bell is the senior currency strategist at xe money transfer in Auckland. You can contact him here »