Probably not. The stock markets are hitting another historic high, while the US dollar is strengthening against the Japanese Yen and making an eight-month high. The selling season in the U.S. was in normal rhythm. Despite the slowdown in wage growth, consumer spending increased by 0.3% in December.
Whatever these reports are, you still can’t ignore the problems with sales during the holiday season. Trade wars, tense situation in the Middle East can make 2020 a very difficult year for trade.
Chart of the day USD Index
But the US government and the Fed have prepared many more surprises this year. Some are promising tax cuts that will fuel the rally in the market, while others are very optimistic about the prospects for labor and real estate. The first phase of U.S.-China trade relations has already been signed, although it is not enough to ease trade tension. Investors hope that markets will be able to breathe a little calmer in the next few months, while the US and China will be able to negotiate further. One thing to say is that the U.S. government and the Fed are very eager to see a strong economy in their country and are doing their best to make it happen as soon as possible.
Euro’s not going anywhere in a hurry. Chatter in a narrow range does not give a reason to see any emerging trend. The U.S. dollar ended the week on a positive note and showed good growth, although the fundamental data on the U.S. did not meet the expectations of the market. This week is likely to pass for the Euro in a narrow range between 1.1060 – 1.1200
Gold is still an insurance policy for big investors. The increasing politicization of large central banks makes us think about the future of world currencies. It is already clear that the U.S. government will gradually devalue its own currency, and the price of gold is tied to the dollar, which will certainly lead to an increase in the price of the metal.
What’s waiting for us today?
02.30 Decision of the People’s Bank of China on interest rate
05.30 Industrial production in Japan for November since the beginning of the year
08.00 Producer price index in Germany for December
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