EARLIER last week, US President Donald Trump commented of positive results on a trade talk with China and proposed an extension of the tariff deadline while calling to meet Chinese President Xi Jinping in late March. On Friday, Trump changed his mind and asked China to remove the agricultural tariffs immediately as an exchange for the extension on the deadline for the trade talk. There are still no news on the extension of the deadline.
President Trump’s ex-lawyer Michael Cohen gave his testimony against Trump in court. Cohen confessed all his wrongdoings and exposed the various cases of bribery, ex-marital affairs, business misconducts, cheating during the Presidential campaign and dishonesty of Trump before and during his time in the office. Cohen will be admitted to jail from May onward for a three-year term for his financial crimes and previous frauds while in Congress.
During mid-week, the peace talk between Trump and North Korean leader Kim Jong-Un in Hanoi collapsed, leading to the cancellation of a meeting between the two on the first day of the summit. Kim asked for the full sanction on North Korea to be lifted while he promised to remove one nuclear base and vows not to conduct any more nuclear tests. President Trump disagrees and calls off the talk.
British Prime Minister Theresa May postponed the voting day for the Parliament to March 29. Members from cabinet are unhappy on the outcome of the Brexit with the European Union while many ministers are prepared to resign if no deal is reached on the Parliament’s voting day. Opposition Labour Party is proposing for another referendum.
Huawei’s CFO Meng Wanzhou will appear in Canada’s court for hearing on 6 March for the extradition to US territory. The decision to proceed with the extradition has increased tension between US and China as well as Canada.
US dollar/Japanese yen rose after mid-week when the Trump and Kim talks were canceled. The market surpassed 111 as the dollar surged. This week, we reckon the trend will stay firm and sit on the 111 support. We foresee profit-taking will emerge once the bulls reach 112.60.
Euro/US dollar encountered strong resistance at 114 area last week. Moving forward, we foresee the trend will trade in a narrow range from 113 to 114 as the dollar may firm up slightly.
British pound/US dollar fell from the 1.3340 resistance last week. The market will be uncertain but the range will be contained from 1.31 to 1.3450 this week.
However, the Brexit created much uncertainties and the market’s hedge against the falling euro might push the pound higher. Piercing above 1.3350 level will drive demand higher to 1.35 in the near future.
Gold prices dropped on Friday and settled below US$1300 per ounce level. This week, we project the trend will be weak and likely reach US$1,280 per oz region before bargain-hunting steps into the market. Overall range is expected to trade from US$1,280 to US$1,310 per oz.
WTI Crude prices are expected to hold better this week as most selling activity will move to yellow metal. The market support will likely be at US$54 per barrel and US$52 per barrel levels. This week, we foresee limited trading activities in market and the range will be contained from US$54 to US$58 per barrel. Dollar will remain the main catalyst to the crude’s direction.
Silver prices hit US$15.20 support on Friday close. This week, we forecast the trend will be supported at US$14.80 to US$15 per oz area with some buying interest and overall trend limited below US$15.50 per oz.
Crude Palm Oil (FCPO) Futures on Bursa Derivatives fell last week amid weak exports and rising inventories. This week, we foresee the range will be prone to bullish sentiments with support sitting at RM2,140 per MT area.
Dar Wong has 30 years of trading and hedging experiences in the global financial markets. The opinion is solely his own. He can be reached at www.pwforex.com.
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Source: Borneo Post Online