Dubai: Investors around the world will yet again turn their gaze to the US and China this week for any hints on trade negotiations between the world’s two largest economies after hopes for a breakthrough faded on Friday.
Chinese officials unexpectedly cancelled a visit to farms in Montana and Nebraska on Friday after wrapping up talks in Washington, and returned to China earlier than planned. The Yuan took a hit from the news, as did US stocks as many investors took the cancellation as a sign that a trade deal was nowhere in sight.
Analysts said the market have a “cautious undertone,” with the upcoming trade talks between the US and China in October having the potential to set market sentiment for the last quarter of this year.
Across the pond, however, optimism on a trade deal for the UK as it attempts to leave the European Union rose after president of the European Commission Jean Claude Juncker said he was doing everything he can to reach a deal.
Han Tan, market analyst at FXTM, said that markets may be reading too much into Juncker’s statement after the Sterling rallied past the $1.25 mark.
“It remains to be seen whether the Pound can push on from current levels. Should Juncker’s perceived optimism over a Brexit deal be found wanting and the UK-EU impasse becomes evident once again, the Pound may very easily unwind recent gains and falter back towards the 1.20 mark against the dollar,” he said in a note.