EU REACHES A DEAL WITH THE UK AS THE TARIFF DEADLINE LOOM

The Japanese Yen fell against major currencies after the country announced its monthly trade balance. Data from the statistics office showed that the annualized exports rose at a 1.8% rate while imports rose at 16.5%. Analysts were expecting gains of 1.9% and 17.1% respectively. The country’s trade balance rose to $3 billion compared to last month’s deficit of $944 billion. The yen was lower than the dollar, euro, and pound by 0.17%, 0.10%, and 0.67% respectively.

The dollar fell after increased political tensions in the United States. Over the weekend, the talk in Washington was about the ongoing Mueller probe. On Saturday, Trump’s lawyer asked the Assistant Attorney General to end the probe and yesterday, Trump attacked the investigating team directly on Twitter. Traders believe that the president is exposing himself by attacking the team investigating him. The dollar index was lower by about 0.05% while the index futures showed losses of more than 1%.

The Euro rose following the news that the EU had reached a transition deal with the United Kingdom. The two sides called the deal ‘significant in ensuring an orderly transition’. For months, the UK has been trying to get a written promise from the EU about the transition.

German stocks were lower by almost a percentage point following the tumult in Washington and as the trade debate continues. Two weeks ago, Trump proposed new tariffs on steel and aluminum. A key point in his statement was his openness to exempt countries. Already, he exempted Canada and Mexico because of the ongoing negotiations on NAFTA. Since then, the European Union has been trying to appeal to the administration for an exemption. As the deadline approaches, the stocks in Germany led by Henkel, VW, and SAP have been hurt. Today, the three were down by 2.94%, 1.27%, and 1.20% respectively.

USD/JPY

The USD/JPY pair is currently trading at 106.21. The pair’s 50-day Moving Average has crossed the 25-day Moving Average headed higher. It is now pushing higher in its attempt to reach the significant resistance level of 106.40. This could change as traders wait for the decision from the Fed this Wednesday.

DAX

The DAX index fell by almost a percentage point following the deadline set by Donald Trump on tariffs. It fell to a low of 12,222 euros, which is the lowest level since Wednesday last week. The index could try to regain some of the losses as traders wait for the definitive status of the tariffs and the response that will come from the EU.

EUR/USD

The EUR/USD pair jumped after the EU announced a transition deal with the United Kingdom. The pair traded at an intraday high of 1.2324, ending a slide that started on Wednesday when the pair traded at 1.2412. Following the news, the pair could continue moving higher as traders follow on the latest developments.