US President Donald Trump gave the foreign exchange markets a twist over the weekend by announcing that a proposed plan to add additional tariffs onto imported Chinese goods would be suspended.
Trump made the move after he said that talks between the two nations were “productive” in nature. It is believed that Trump will now organise a meeting with the Chinese leader, Xi Jinping, to discuss the issue further.
However, in the short term, it means that US tariffs on $200 billion dollars’ worth of goods will not rise from 10% to 25% as had been planned.
The main winner was, of course, the onshore yuan in China, which went up by 0.6% to 6.6730 yuan in relation to the US dollar. This marked its highest point for several months.
The Australian dollar, which is viewed by many traders as a currency which often moves in relation to Chinese economic performance due to the interlinked nature of the two economies, went up by half a percentage point in the AUD/USD pair to $0.7162.
As a new week begins, it’s a good idea to look at what the economic calendar has in store for forex traders.
Today (Monday), there will be a series of releases from the US. These include the Chicago Fed National Activity Index (CFNAI), which will be published by the Federal Reserve Bank of Chicago at 1.30pm GMT.
December’s wholesale inventories data for the US will be out at 3pm GMT. This is due to show a shift from 0.3% to 0.2%.
There’ll be a speech from a major central banker at 4pm GMT. Richard H. Clarida, who is currently Vice Chairman of the Board of Governors of the Federal Reserve System, will give a message.
Into tomorrow, British Prime Minister Theresa May will speak on the ongoing Brexit negotiations at some stage in the day.
There’ll be more for the pound to contend with too as a report on the level of inflation in Britain is due out, also at an unspecified time.
The focus will shift back on central bankers again later in the day. At 2.30pm GMT, Yves Mersch, who is on the Executive Board of the European Central Bank, will make a speech.
At some stage during the day, US Federal Reserve chair Jerome Powell will speak in front of the US Congress. This is likely to also continue into Wednesday.
Wednesday’s main statistical releases will come from Canada. A whole suite of consumer price index data points will be out at 1.30pm GMT, with the overall CPI release expected to show a month on month change from -0.1% to +0.2%.
On Thursday, preliminary French consumer price index information will be out at 7.45am GMT. This data, covering February, was last recorded month on month at -0.6%.
A preliminary gross domestic product price index for the fourth quarter of last year is expected to be released in the US at 1.30pm GMT. This is expected to show a change from 1.5% to 1.7%.
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