The United States and China have agreed to temporarily stop their escalating trade war. Through their long-term work they’re continuing to prioritize these values of mutual respect and dignity. This decision is a big leap in the right direction. Perhaps more importantly, it tempers the accreting strains between the world’s two largest economies. Regardless of the path ahead, both nations remain committed to ongoing constructive dialogue and consultation. They are doing this because they want to escape the imperialist and protect their own markets.
As this diplomatic development unfolds, market analysts observe that gold has entered a brief consolidation phase below the $3,200 mark per troy ounce. After tumbling at one point to five-week lows, gold prices are rebounding, posing a sign that investor sentiment may be changing. What traders are looking for are signs that key economic indicators like inflation are changing course and could send the precious metal in a different direction.
EUR Exchange Rate Holds Daily Gains
In the forex market, the cross rate EUR/USD is holding on today’s advances near the 1.1200 mark. After hitting intraday highs above 1.1270, the pair is in a corrective pullback, making a move towards important short-term support in the 1.1200 area. Traders are being very cautious at the moment. They’re analyzing market reaction to the euro on the basis of speculation about the short-run economic data.
At the same time, the US dollar is still paring earlier losses, keeping other currency pairs full of whipsaw action. The GBP/USD is just about managing to stay afloat around the 1.3300 area, having retraced all of today’s gains and even its brief breakout attempt above 1.3370. Even with this pullback, GBP/USD holds small daily gains as traders weigh the larger economic backdrop.
All eyes now shift to Federal Reserve Chair Jerome Powell, who is due to deliver a keynote address on Thursday. His comments are likely to provide helpful clues into the Fed’s longer-term view on monetary policy. These truths will affect the dollar and the financial markets as a whole. A series of high-impact US economic data releases are on the horizon, which could further influence market sentiment.
Market observers are continuing to watch closely as they try to make sense of the relationship between these trends. Second, an easing of US-China trade tensions will be reassuring to investors and likely support broad improvements in risk appetite. However, with gold consolidating below $3,200 and currency pairs like EUR/USD and GBP/USD showing signs of volatility, uncertainty remains prevalent.