Trump lands in China, dollar wobbles

November 9, 2017 09:23 AM

Asian stock markets were mostly higher during early trading on Thursday, following Wall Street’s modest gains overnight.

The positive momentum from Asia is likely to support European stocks this morning, with the bullish sentiment trickling back down into Wall Street later in the day. World stocks have had a brilliant trading year, thanks to rising confidence over the global economy and optimism towards Donald Trump’s proposed tax plan. While stock markets may venture higher as the current risk-on attitude empowers equity bulls, the question is - for how long?

With concerns rising over possible delays in the U.S tax reforms, equity bears could make an unwelcome appearance, consequently exposing global stocks to downside risks. Investors should also keep in mind that geopolitical tensions and political risk in the background, have the ability spark risk aversion – resulting in market players offloading riskier assets for safe-haven investments.

Trump lands in China...
All eyes remain on Donald Trump’s tour of Asia as he lands in China today. He is expected to discuss trade and North Korea with Chinese leaders in Beijing. With the U.S. President softening his aggressive rhetoric towards North Korea earlier in the week, by urging the nation to come to the negotiation table, it will be interesting to see how the meeting with his Chinese counterpart, Xi Jinping, plays out.

Dollar Index treads water below 95.00
The Dollar Index struggled for direction on Thursday, following reports of possible delays in U.S. tax reforms.

Technical traders will continue to observe how prices behave within the range with support at 94.40 and resistance at 95.10. A decisive break about 95.10 may inspire bulls to challenge 95.50. Alternatively, an intraday breakdown below 94.70 could open a path towards 94.40 and 94.00, respectively.

About the Author

Lukman Otunuga is an FXTM research analyst