All Eyes on Trade Talks and Fed Talks
It’ll be a busy week for U.S. policymakers, as the Federal Reserve gears up for its first meeting of 2019 on January 29-30, and President Trump’s advisors continue to work to resolving issues that have caused the longest government shutdown in U.S. history. Over the weekend Trump agreed to a temporary halt to the shutdown, which will resume in 18 days if a deal isn’t made about Trump’s proposed border wall with Mexico.
Also taking place in Washington this week will be high-level trade talks on January 30-31 between Chinese Vice Premier Liu He and a U.S. delegation of trade advisors, who will continue working towards a resolution of the U.S.-Sino trade conflict.
The markets have taken note of the impending meetings and the related challenges, with the dollar easing as traders expect the Fed to ease its tightening policies in the near term. The dollar index slumped 0.8 percent on Friday, and was down a further 0.1 percent as of 3:21 p.m. HK/SIN on Monday, to 95.78 .DXY. The greenback eased against the yen, trading down 0.17 percent to 109.34, though it held onto gains against the euro and the British pound, trading at $1.141 and $1.3177 respectively.
Gold was trading higher as trader, remaining near a seven-month peak hit on Friday, on expectations that the Fed will keep rates stable in this weeks’ meeting. Gold often appreciates on expectations of lower interest rates which reduce the opportunity cost of holding non-yielding bullion. The precious metal was trading up 0.18 percent to $1300.50 per ounce in the mid-afternoon in Asia.