Brexit hysterics and dollar benefit

This Tuesday, British Prime Minister Theresa May will present a new plan for secession from the EU to Parliament. In the case of non-acceptance of the Brexit agreement by March 29, the country may lose more than $ 1 trillion. Almost as many of their British assets were withdrawn in anticipation of leaving the group. The amounts are staggering. To avoid the worst, English officials need to find a compromise on some issues. There was almost no time left to think, the bill went on for days.

Tomorrow the pound may fall, the rebound from the level or a hard break depends on the reaction of parliamentarians.

As for the currency pair GBP / USD as a whole, the medium-term upward correction continues. The goal is 1.32-1.3250, buyers are still very strong.

Undoubtedly, the most interesting currency of this week will be the US dollar. The US president killed several birds with one stone. He embodied the threat of refusal to travel to the Davos forum, thereby proving the categorical nature of his position regarding the issue of illegal immigrants.

Donald Trump also made it clear to the world that the attempt to get together and resolve international issues without the presence and support of the United States is obviously a failure.

The owner of the White House, in any case, will get his after a meeting with the Prime Minister of China, which will be held in late January in the United States. Recall, the Celestial Empire made an offer on the eve of Washington, which is difficult to refuse, parity of import and export.

For five years, America is fully capable of expanding the list of goods and services in the Chinese market by about $ 1 trillion. There are two sides here, the first is almost a monopoly. The second is a big dependence on long-term relations, where Washington will not have to dictate terms, but act according to a treaty.

Few people love the framework, but here we are talking about world power. There is one more thing. The fact is that the Chinese market is not rubber, and if the States receive a blank check, some countries will run away. Do not forget about the raw materials, not America will fill with a $ 1 trillion niche burgers. This is a pebble to the Russian Federation.

Last January week will give the market a range of activities from the United States. On Wednesday, data on the growth of the country's economy for the fourth quarter will be published. The indicator is expected at the level of 2.6% y/y. Investors are now concerned about the risk of slowing global GDP, so the US report will be in the focus of the market. If the data exceeds forecasts, then the risky assets and assets of the EM will respond positively. Worse than expected figures will further exacerbate concerns about the growth of the global economy and intensify the demand for safe assets.

On this Wednesday, the FOMC interest rate decision will become known. The federal funds rate is likely to remain unchanged at 2.50% (upper limit). Comments by Fed Chairman Jerome Powell will be the most significant for traders. The words of a financial official will directly affect risky assets: support a recent rally or complete it.

In this regard, the movement of gold will be aggressive. The results of the forum in Davos, the uncertainty of the conflict in Venezuela, the Chinese guests in the USA, the Brexit hysteria and the decision on the interest rate - this number of events in one week will knock the ground out from under the feet of investors. Precious metals, cryptocurrencies, and the Japanese yen are currently in a favorable growth climate.

The EUR / USD rate defended 1.13, left the downward channel and aims at 1.1435-1.1505-1.1550. Now the market is looking up.