Forex Morning Market Report: Currencies Wait For Trade Deal

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EUR shows a slight increase against USD during today’s Asian session, developing a “bullish” momentum formed at the end of last trading week. On Monday, the buying sentiment for EUR was supported by weak December report on the US labor market, which was released last Friday. There were few interesting macroeconomic statistics at the beginning of the new week, so investors concentrated on previous publications, waiting for the signing of a trade deal between the United States and China. Today, the ECB representative Yves Mersch is scheduled to speak; however, the main attention will be focused on statistics on consumer inflation from the US.


GBP shows ambiguous trading dynamics during today’s Asian session, testing for a breakdown the important level of 1.3000, which it reached for the first time in the current calendar year. Pressure on the instrument is exerted by weak macroeconomic statistics from the UK published on Monday. Industrial Production in November decreased by 1.2% MoM after an increase of 0.4% MoM a month earlier. Analysts expected a decline of 0.1% MoM. In annual terms, production fell by 1.6% YoY after a decline of 0.6% YoY in October. Forecasts suggested a decrease of 1.4% YoY. GDP in November also showed negative dynamics, having decreased by 0.3% MoM after a slight increase of 0.1% a month earlier. Experts expected zero dynamics. Such weak results of the British economy led to the resumption of talk about the possibility of a new interest rate cut by the Bank of England.

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AUD shows multidirectional trading dynamics during today’s Asian session, consolidating after updating local highs of January 7 the day before. The instrument is trading near the opening mark, testing the level of 0.6900 for a breakdown. Investors focus on the block of statistics on exports and imports from China. In addition, traders expect the imminent signing of a trade agreement between the United States and China, which provides significant support to the pair. Exports from China in December grew by 7.6% YoY after a decline of 1.3% YoY a month earlier. Experts expected an increase of 3.2% YoY. Imports for the same period rose sharply by 16.3% YoY after rising by 0.5% YoY in November. The indicator also turned out to be significantly better than its forecasts of 9.6% YoY.



USD is showing moderate growth against JPY during today’s Asian session, updating the highs of May 2019. The pair is trading near 110.05, adding about 0.12%. Published macroeconomic statistics from Japan has a mixed effect on JPY. Bank Lending in Japan in December slowed from the previous 2.1% YoY to the current 1.8% YoY, which turned out to be worse than analysts had expected. Current Account n.s.a. fell in November from JPY 1816.8B to 1356.8B, which was only slightly better than forecasts of JPY 1423.3B. The balance of foreign trade in November showed a deficit of JPY 2.5B, while in October the balance remained surplus at JPY 254B. Experts expected a larger deficit of JPY 412.6B.


Gold prices show negative dynamics during today’s Asian session, developing a “bearish” momentum formed yesterday. The instrument is trading near 1535.00, losing about 0.60%. The pressure on gold is exerted by moderate optimism, which investors show in anticipation of a trade agreement between the United States and China. The ceremony of signing the first phase of the contract should be held at the White House on January 15. De-escalation of tensions in the Middle East also contributes to lower demand, after the United States decided to limit itself to economic measures to influence Tehran. Last Friday, Washington imposed additional sanctions on Iran, threatening with new measures if necessary.

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