EncoreFX’s daily market updates are written by our experienced and professional dealing team.
Kiwi continues to stand firm against most major currencies despite threats from Trump to shut down government over funding for a border wall, Brexit uncertainty, and ongoing US-China trade tensions.
Pound Remains Under Pressure on Talk of a No-Confidence Vote
The pound continued to fall overnight as British PM Theresa May’s hopes of renegotiating a Brexit deal with the EU fade following German Chancellor Angela Merkel announcing, “no more Brexit negotiations”. The EU will look to give Britain reassurances on providing further clarifications on the existing withdrawal deal, however as European Commission Jean-Claude Juncker previously stated, “there is no room whatsoever for renegotiation”. British parliament will vote by 21st January with the key sticking point on the Northern Irish backstop.
China to Cut Tariffs on US Autos
Chinese Vice Premier Liu He has told US Trade Representative Robert Lighthizer and Treasury Secretary Mnuchin that China would cut the tariffs on imported US cars to 15% from the current 40%. Trump tweeted “Very productive conversations going on with China! Watch for some important announcements!” Market sentiment remains fragile as the announcement was overshadowed by Trump stating he would be proud to shut down the government for border security.
French Woes Weigh On Euro
Violent protests in France over the weekend, on planned fuel tax hikes, has seen the Banque de France cut its Q4 GDP forecast from 0.4% to 0.2%. Brexit uncertainty also weighs on the Euro with the NZDEUR opening at .6070 today, up 0.4% overnight
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