Yuan Gains, U.S. Dollar Slips on Trade Deal Prospects
The Chinese yuan gained against the U.S. dollar while the greenback traded slightly lower on Monday in Asia, as the prospects of a Sino-U.S. trade deal improved investors’ appetite for riskier assets.
U.S.-China trade talks will continue in Washington this week after the two sides wrapped up the last discussions in Beijing last week.
Both the U.S. and China reported progress in the latest trade negotiations, although U.S. President Donald Trump said on Friday that the talks were “very complicated”. The President added that he might extend the March 1 deadline and keep tariffs on Chinese goods from rising.
The USD/CNY pair last traded at 6.7547 by 11:52 PM ET (04:52 GMT), down 0.2%.
Meanwhile, the Federal Reserve is due to publish the minutes of its January meeting on Wednesday where it has kept rates on hold and surprised markets by shifting to a more dovish stance on future rate hikes, citing subdued inflation and rising risks to global economic growth.
A number of Fed officials, including New York Fed President John Williams (NYSE:WMB), St. Louis Fed head James Bullard and Fed Governors Randal Quarles and Richard Clarida are set to speak at the U.S. Monetary Policy Forum later this week.
The U.S. dollar index slipped 0.1% to 96.610.
The greenback slid lower on Friday after San Francisco Fed President Mary Daly suggested the central bank may hold off on raising interest rates in 2019. The U.S. currency posted the second week of losses and is down 1.7% year to date.
Elsewhere, the AUD/USD pair rose 0.2% to 0.7151. The Reserve Bank of Australia is to publish the minutes of its latest policy-setting meeting on Tuesday.
The USD/JPY pair edged up 0.1% 110.53.
GBP/USD rises to 1.2920 as UK PM May again heads for Brussels
- GBP/USD trades around 1.2920 ahead of London open on Monday
- Expectations surrounding soft Brexit and upbeat UK retail sales recently pushed the pair upwards
- The 1.2930 and 1.2980 can act as immediate resistances with 1.2840 likely being nearby rest
The GBP/USD pair rose to the day’s high of 1.2920 heading towards European sessions on Monday. Speculations that the UK Prime Minister Theresa May could convince EU over favorable or delayed departure pleased the British Pound (GBP) traders off-late. PM May heads to Brussels on Monday in order to hold talks with Commission President Jean-Claude Juncker.
On Friday, the news that Irish foreign minister has struck a conciliatory tone helped built initial GBP trade sentiments. The up move was then backed by better than forecast +0.2% growth of the UK Retail Sales m/m to 1.1%.
However, a recent report from Reuters said that France isn’t likely to offer concessions on the Irish backstop to end the stalemate over the Brexit negotiations as notified earlier by the UK Times report.
With nearly six weeks to leave the EU, the UK PM May is struggling to keep her plan on the table after witnessing another parliament defeat last week. She has already promised to try till February 26 to get a favorable trade deal from the EU and update her progress in the parliament while British policymakers could get the control from February 27 onward.
The European Commission President Jean-Claude Juncker has been tough on Brexit and might not relinquish his control over the Irish backstop, which in turn could negatively affect the present optimism. Though, actual updates from the meeting can only confirm the proceedings.
GBP/USD Technical Analysis
Given the break of 1.2915, the GBP/USD pair needs to surpass 1.2930 in order to aim for 1.2980 and 1.3000 resistances.
Failure to hold recent recovery can drag the quote back to 1.2840 and 1.2780 support levels.
Stock Market News
U.K. lawmakers scold Facebook, call for increased social-media regulation
A U.K. parliamentary committee rebuked Facebook Inc. in a new report that calls for regulation and intensified scrutiny of social-media companies.
The report urged a compulsory code of ethics for technology companies to deal with harmful or illegal content on their sites. It also called for the creation of an independent regulator that has the power to launch legal action against companies in breach of the code that could result in hefty fines.
Large sections of the report were devoted to criticism of Facebook FB, -0.88% , which it said had intentionally and knowingly violated both privacy and anticompetition laws in how it handled user data and tried to stifle competitors. The report expands on earlier recommendations from the committee published in July and follows a monthslong inquiry into tech companies and issues of privacy, misinformation and the power of their platforms in the wake of the Cambridge Analytica scandal.
The committee recommended laws governing privacy, data protection, antitrust and competition should be used to rein in companies. “The big tech companies must not be allowed to expand exponentially, without constraint or proper regulatory oversight,” it said. “If companies become monopolies they can be broken up, in whatever sector,” the House of Commons Digital, Culture, Media and Sport Committee said in its final report on disinformation and “fake news.”
Here’s why Apple is cutting iPhone prices in China
- Retailers across China are slashing prices of the iPhone
- Sales of Apple’s flagship product are down nearly 20 percent in China, according to research firm IDC
- Comparable phones in China retail for far less than the price of an iPhone
Retailers across China are slashing prices of the iPhone.
Apple announced last month it would cut prices of some of its flagship devices, by pegging its retail value to local currencies instead of the strong U.S. dollar.
In recent months, there have been growing concerns about the iPhone maker’s ability to innovate — as its Chinese rivals up their game as well. It also comes amid signs that Apple’s growth and dominance in the smartphone market could be under pressure.
iPhone shipments were down nearly 20 percent in China in the fourth quarter of 2018, according to research firm IDC. The slump in China was partially responsible for a 27 percent decline in Apple’s revenue coming from the world’s largest smartphone market.
On the other hand, things are looking bright for Chinese telecoms giant Huawei Technologies.
The smartphone maker saw its shipments in China grow 23 percent in the same time period and in mid-2018, according to IDC. Last year, Huawei became the world’s second largest smartphone seller behind Samsung, surpassing Apple briefly— the iPhone-maker has since reclaimed it’s second place.
According to an IDC report in January, global smartphone shipments fell nearly 5 percent in the fourth quarter of last year.
That could in part be due to customers around the world holding onto their phones for longer periods.
But Apple’s slump in sales in emerging markets like China and India also come down to its expensive price range.
Compared to smartphones from China, iPhones are not cheap. For instance, the iPhone XS Max, costs nearly $1,400 — about twice the price of Huawei’s Mate 20 and nearly three times the cost of Xiaomi Mi Mix 3.
iPhone prices are “just too expensive,” Kiranjeet Kaur of IDC told CNBC last week. “At what iPhones used to sell at earlier, there’s like lots of competition coming in … especially from Huawei.”
Chinese players have also been coming up with new features that have created a distinction for the Chinese brands, said Kaur. “Consumers no longer feel that the Chinese players are just following what some of the global players, or what Apple is doing — but rather they are stepping up the game and creating their own new trends in the market.”
Bitcoin holds above $3,500, but analyst warns of lower prices ahead
Bitcoin prices fell on Friday, with one expert cautioning that further declines were on the horizon for the world’s most popular digital asset.
In afternoon trade, a single bitcoin BTCUSD, +2.72% was fetching $3,560.90, down 0.3% since Thursday’s level at 5 p.m. Eastern time on the Kraken crypto exchange. The digital currency has struggled to capitalize on last week’s move to a two-week high above $3,700.
What are analysts saying
“Bitcoin continues bouncing around in the upper $3K range. But we saw this same behavior at $9K support, $8K support, $7K, $6K, $5K and $4K,” according to Jani Ziedins of the Cracked Market blog.
“By now the pattern is pretty obvious. Investments that are oversold bounce quickly and sharply from those grossly unjustified levels. The lack of a decisive bounce tells us that bitcoin is not grossly oversold yet. That means lower prices are still ahead of us.”
Altcoins and futures
Altcoins — cryptocurrencies other than bitcoin — were mostly lower on Friday. Ether ETHUSD, +5.29% fell 0.4% to $120.09, Bitcoin Cash BCHUSD, +6.29% was down 0.4% at $120.00 and Litecoin LTCUSD, +2.25% was up 0.2% to $41.64, while XRP XRPUSD, +3.30% fell 1% to 30 cents.
Bitcoin futures ended mostly unchanged on Friday. The Cboe Global Markets March contract XBTJ9, +3.67% finished up less than 0.1% at $3,557.50, and the CME Group February contract BTCG9, +3.51% ended the session unchanged at $3,565.
Risk Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63.18% of retail investor accounts lose money when trading CFDs with this provider. The information contained in this market review should not be construed in any way, as containing investment advice and/or a suggestion and/or solicitation for any trading activity and financial transaction. There is no guarantee and/or prediction of future performance. EuropeFX, its affiliates, agents, directors or employees do not guarantee the accuracy and validity of any information or data made available and assume no liability as to any loss arising from any investment based on the same. Trading Forex/CFD’s carries a high level of risk and can result in the loss of your whole investment. Forex/CFD’s are leveraged products and therefore Forex/CFD’s trading may not be appropriate for all investors. It is recommended that you do not invest more money than you can afford to lose to avoid significant financial problems in the case of losses. Please make sure you define the maximum risk acceptable for yourself.