Current optimism about the Brexit agreement and de-escalation of the trade war will be short-lived. Britain’s departure from the EU is going to hurt in any event, resentment between China and the US is too deep and Europe is very vulnerable.
Financial markets are focused on Washington with a looming impeachment, the ongoing trade war and the uproar over US President Trump’s Syria policy. Will American politics tip the scales of the global economy?
Several developments are pointing to more upside potential for EUR/USD, including slowing US growth and therefor more rate cuts by the Fed, the risk of dollar interventions and a possible China-US trade deal.