Thursday, January 17, 2019 9:26:51 AM- Nigerian Stock Exchange.

  Eu offers concessions to US - trade tension defuses; King Dollar takes a break.

      by Lukman Otunuga

26 July 2018 ( Lagos ) : Market sentiment received a solid boost after US President Donald Trump obtained concessions from the European Union to avert a transatlantic trade war.

The United States and Europe have reached a deal to work towards “zero tariffs, barriers and subsidies on non-auto industrial goods” in a bid to defuse escalating trade tensions. 

Investors took comfort in the encouraging meeting outcome, with Asian stocks edging higher this morning following overnight gains on Wall Street. While the positivity from Asia could carry over into European markets, caution ahead of the looming ECB policy meeting may restrict the upside momentum.

King Dollar bulls take a short break

Dollar tumbled to a two-week low against a basket of major currencies after the US and the European Union agreed on steps to de-escalate trade tensions.

The downside was complimented by disappointing new homes sales data from the United States which encouraged sellers to attack. There is also a suspicion that the Dollar’s depreciation could be attributed to a bout of profit taking ahead of Friday’s highly anticipated US GDP report. While the Dollar could depreciate further in the near term, market speculation of higher US interest rates this year is likely to limit the downside losses. Focusing on the technical picture, the Dollar Index has scope to hit 94.00 in the near term.

Commodity spotlight – WTI Oil

Oil prices edged higher on Thursday morning after the Energy Information Administration reported a large drawdown in US Crude inventories. A softer US Dollar has also complemented the upside with prices trading around $69.30 as of writing. Focusing purely on the technical picture, WTI Crude could appreciate back towards $70.00 if bulls are able to conquer the $69.60 level.

Source: Lukman Otunuga, Research Analyst at FXTM

Reporting for EasyKobo on Thursday, 26 July 2018 in Lagos, Nigeria

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