The outcome of the G20 summit was the signing of a new NAFTA trade agreement between the United States, Mexico, and Canada. Donald Trump called the new trade agreement modern and correct.
Such good results were achieved after negotiations between the United States and China, as a result of which an agreement was reached to suspend the trade conflict. Traders positively perceived this news, which reduces the likelihood of aggravating trade conflict and fueling the Cold War between the two countries.
After the talks, a joint statement was published, in which country representatives reaffirmed the importance of the multilateral trading system.
The United States announced its readiness to postpone the increase in duties on imports of Chinese goods worth $ 200 billion from 10% to 25%. In turn, China agreed to start lowering and then completely remove the duties on imports of American cars. Let me remind you that currently, the duty on cars from the United States is 40%.
As for fundamental statistics, it slightly damaged the rate of the European currency on Friday, which fell against the US dollar.
According to the report, the unemployment rate in the eurozone in October of this year again remained unchanged, which can be compared with the slowdown in the European economy, which is observed at the end of this year. According to official data published on Friday, the number of unemployed in the eurozone decreased by only 12,000, while unemployment in the eurozone remained at 8.1%.
Weak data on the growth of inflation in the euro area also did not fall in favor of investors. According to the report, in November of this year, compared to November of last year, the consumer price index in the eurozone rose by 2% after rising by 2.2% in October. Economists had expected the index to increase by 2.1% in November. As for core inflation, it is even less. The growth of the basic consumer price index in November slowed to 1% from 1.1% in October, while economists had expected it to remain unchanged.
Many market participants are counting on inflation rates since they are the ones who play a key role in influencing the ECB's monetary policy. Weak performance may have an impact on the regulator's decision regarding the timing of interest rate hikes next year. However, first, you need to deal with the curtailment of the asset repurchase program, which is scheduled for this month.
The indicator of business activity in Chicago in November of this year has grown significantly, which supported the US dollar on Friday afternoon. According to the MNI Indicators report, Chicago PMI Purchasing Managers Index in November rose to 66.4 points from 58.4 points in October. Economists had expected the figure to be 58 points. I recall that values above 50 indicate an increase in activity.
The speech of the representative of the Fed John Williams did not affect the US dollar, as the president of the Federal Reserve Bank of New York, in general, did not touch upon the issue of monetary policy. The only thing that Williams paid attention to is the situation with interest rates, which change towards steadily low levels. This suggests that central banks may need to explore new strategies in order to keep inflation at the desired level.
As for the technical picture of the EUR / USD pair, it is quite likely that the upside potential of the euro will be limited by large resistance around 1.1390-1.1400. Only its breakthrough will lead to the continuation of the growth of the trading instrument, with the update of the highs of 1.1440 and 1.1480.
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