Foreign exchange market: investor Sentiment improves

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Investor sentiment improve as the session on Thursday. After the subsidence of the indexes on wall street, where were particularly affected stocks in the financial sector, Asia closed the session in different ways, but mostly in the black. European futures settled in positive territory. Reasons for shopping investors have. This is the resumption of negotiations between the US and China. Beijing is rumored to be willing to make some concessions. However, their character is not up to the scale of the reforms being promoted by trump. So on this front is still present high uncertainty. Mei managed to win approval of a draft agreement on Bracito in the Cabinet. Now the Prime Minister needs the approval of the plan in Parliament, and here there are doubts.
Meanwhile, the pound continues to advance, albeit hesitantly. The pair jumped at the 1.31 mark, but in the short term it is possible to lock in your profits: in order to protect themselves from risk, traders can hedge by sales of sterling for a case of receipt of negative news on Brazito. British retail sales will have a short-term impact on the pound, and if the results are not disappointing, the quotes will go on the decline.
States also today publish a report on retail sales that will be carefully evaluated by the market participants in the context of fed policy, since private consumption is one of the key indicators that guide the Central Bank in deciding monetary policy. Strong indicators able to reduce the current pressure on the dollar, which reduced the third day in a row, mainly due to progress on Bracito, which provides support to European currencies.
The ruble strengthened sharply the day before and started the session on Thursday with a bullish gap. The result is a pair dollar/ruble, which yesterday touched mark 68,20 RUB reached the area of 66,40 RUB In favor of the Russian currency plays several factors. It is a local weakness of the dollar, the recovery in oil prices, the beginning of the tax period and most importantly – the extension of us sanctions, which will be introduced this year. Further on the mood of the “wood” will be affected by the situation on the market of black gold and the overall health of the dollar in the context of a report on retail sales. It is possible that at some point our currency will go into defense.
Nathan Lambert
Head of research,
Global FX