Yesterday, the World Economic Forum opened in Davos. More than fifty statesmen, including the President of the United States and the Chancellor of Germany, will take part in this event. The main topics of discussion will be the problems of climate change, correction of the “broken” system of economy, as well as preparing for environmental work of the future.
GBP/USD Day Chart
Of course, this event will be closely watched by investors. In such forums new business ideas are born, problems are solved and strategic decisions are made. We are waiting for loud statements from world leaders.
Meanwhile, a new coronavirus is gaining momentum in China, which keeps the whole Asian region in suspense. American and European markets reacted nervously to the situation in China and traded in mixed dynamics.
GBP/USD pair shows good dynamics last days. Yesterday, on the unemployment data, the pair reached the resistance level of 1.3080, which is the upper bound of the two-week descending channel. However, it should be noted that by the end of January, the UK is expected to leave the European Union, after which the stage of trade negotiations will start, which may take longer until the end of this year. If the December GDP of the kingdom shows negative dynamics, this trend will bring the UK closer to economic recession. The combination of these factors may negatively affect the GBP and return it to the December lows at 1.29.
Two weeks later, when Brent suffered the biggest fall in recent years, the market for petroleum products faces a new crisis. Yesterday Libya announced that it was reducing oil production from 1.2 million barrels per day to 72,000 barrels per day. Such statements and refusal to ship oil from major fields may seriously affect the market. However, there is a possibility that Libyan risks may be insignificant on the data on gasoline and distillate reserves in the USA, which turned out to be significantly higher than predicted. At the end of Tuesday trading session Brent was traded at $64.25 per barrel.
What is waiting for us today?
10.30 Net borrowing in the UK public sector
14.30 Chicago FRS National Activity Index
14.30 Canada’s basic consumer price index for 2019
16.00 Bank of Canada interest rate decision
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