News & Analysis

News & Analysis

Welcome to the TradeFred news and analysis section. Here you will find the latest market commentary, company news, plus a whole host of information about Forex and the world of trading.

You can also gain an insight into different strategies and analysis techniques to bolster your existing trading approach. This is just part of TradeFred’s commitment to providing an in-depth and inclusive service to make the most of your investments.

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China vows retribution as US announces fresh tariff hike

US President Donald Trump has poisoned recent Sino-American trade talks and seriously undermined efforts to put an end to the full-blown conflict between the world’s economic superpowers. That is the view of Fang Xinghai, Vice-Chairman of China’s security regulator, who vowed his country would not back down in the face of new tariffs.

Ever since America announced on Monday that it would slap another levy on $200 billion worth of Chinese imports, investors had been waiting with bated breath to see how Beijing would retaliate. Although the exact details of its response are not yet known, China’s commerce ministry confirmed it would seek retribution, adding that it hopes the US would realise the effect its protectionist agenda is having on the global economy.

Just how China will respond is uncertain. Whereas previously it has slapped like-for-like taxes on US products, this time around it is not able to do so. The country only buys $130 billion of American goods and has already targeted $50 billion worth of goods – leaving $80 billion remaining.

That being said, Beijing still has a number of options. It could either announce a higher tariff on all US goods, or even impose restrictions on American companies operating in China. Whatever action it takes, however, is likely to provoke yet another reply from Washington.

Indeed, President Trump has already vowed to enact “phase three” of his agenda “if China takes retaliatory action against our farmers or other industries.” This would include levies on another $267 billion of imports, which the White House claimed are “ready to go on short notice” if necessary.

China is not the only one criticising Washington’s latest actions, with the new tariffs also being denounced closer to home. The National Association of Manufacturers accusing the President of increasing the chances of workers getting hurt.

Meanwhile, the tariffs have also drawn criticism from the US Retail Leaders Association and the Information Technology Industry Council (ITI). Dean Garfield, President of the ITI, called Mr Trump’s actions “reckless” and argued they would “punish American consumers, manufacturers and businesses of all sizes.”

The news does not appear to have affected the USD too much, with the Greenback slightly higher against a basket of major currencies. The Dollar was 0.06% higher against the JPY & GBP as of 08:12 GMT, while it was 0.0001% up on the EUR.

TradeFred’s weekend roundup

Welcome to the latest instalment of our weekend roundup, TradeFred’s look back at the most important news stories that took place while the markets were closed. Today’s edition focuses on escalating trade tensions, more Brexit wrangling and the latest on Australian politics – plus much more besides.

US roundup

Global investors are bracing themselves for a continuation of President Donald Trump’s protectionist agenda, as top US officials claim a new round of tariffs could hit Chinese imports on Monday. Although the levy is said to be 10%, less than the 25% quoted by the administration, it will still affect around $200 billion worth of goods.

These new tariffs will be placed on products such as internet technology products, furniture, tyres and chemicals, plus a host of other items. America and China have already engaged in tit-for-tat levies earlier in the year, with no end in sight of the troubles.

White House spokeswoman, Lindsay Walters, said the President “has been clear that he and his administration will continue to take action to address China’s unfair trade practices. We encourage China to address the long-standing concerns raised by the Unites States.”

Investors had been hoping that the stepping up of trade talks between the two countries was going to thaw relations, however this latest announcement seems to have poured cold water on this. Although progress was thought to have been made, the imposition of new tariffs could seriously derail proceedings.

These fears appear to have been confirmed by Chinese officials, who told the Wall Street Journal (WSJ) that they may decline to participate in future negotiations if the tariffs come into effect. The WSJ quoted one senior figure saying that China would not continue with the talks “with a gun pointed to its head”.

Meanwhile, the looming tariffs appear to have instilled a sense of urgency into the World Trade Organisation (WTO). The body is said to be stepping up talks to reform the process for settling international trade disputes, though did not provide any more details.

At a meeting in Argentina, the WTO said there was an “urgent need” to improve, especially in the face of increasing tensions between the US and China. Germany’s Deputy Economy Minister, Oliver Wittke, said strengthening the organisation was vital “especially in times of ‘America first’ and increasing global protectionism.”

EU roundup

The UK and European Union are getting closer to that illusive withdrawal agreement, Britain’s Brexit minister has revealed. Dominic Raab made the claim after a telephone call with his EU counterpart Michel Barnier.

For his part, Mr Barnier appears to have confirmed this, although he was clear there were still “substantive differences” that still had to be resolved. Both sides of the divide are hoping to each a deal by mid-November.

With the UK set to leave the bloc on March 29th 2019, British Prime Minister Theresa May has faced a series of roadblocks in her attempts to steer the country out of the EU. Her much-maligned “Chequers” proposal has been battered by Brexiteers and Remainers alike, yet she seems dead-set on pursuing it to the end.

Indeed, she has recently issued an ultimatum to critics, saying there is a single binary choice for UK lawmakers to decide upon: her deal, or no deal at all. This came in response to counter-proposals from the Eurosceptic European Research Group (ERG) on how to solve the continuing Irish border issue.

Mrs May has also been dogged by continued speculation that her critics are planning to topple her, with former British Foreign Secretary Boris Johnson the bookmakers’ favourite to assume control. He appeared to try and ease speculation over the weekend, stating his desire was to “chuck Chequers” and not replace the Prime Minister.

Away from Brexit, France’s far-right leader has urged her European counterparts to join together to fight the liberal elite. Marine Le Pen, in her comeback speech after her election defeat, said her party would campaign “in liaison” with its allies.

She said the upcoming European Parliament elections in May would be an opportunity to “beat [French President] Macron“, and “build with our allies…. a majority that makes a break from the decaying European Union.”

Meanwhile, Greece is planning on loosening capital controls very soon – a month after the country emerged from its bailout programme. Its Finance Minister, Euclid Tsakalotos, said: “We will complete the second pillar (of regulations) concerning cash withdrawals and the opening of bank accounts, and we will enter the final phase for the full lifting of capital controls, the third and final pillar... concerning restrictions on moving capital abroad.”

Rest of the world roundup

Australian voters are reportedly happy with their new Prime Minister, yet his party is still on course for a humiliating election defeat. A new poll revealed that although current leader Scott Morrison is preferred to his Labor Party rival Bill Shorten, the opposition party leads the incumbent government by 53% to 47% when it comes to voting intentions.

The electorate is said to be angry about the latest in a series of backroom coups that have usurped sitting Prime Ministers. Three weeks ago, Mr Morrison replaced former leader Malcolm Turnbull after his party turned against him.

Indeed, Mr Morrison’s first test will come next month, when there will be a by-election for Mr Turnbull’s Sydney constituency. What was once viewed to be a safe seat, is now seriously under threat following Mr Turnbull’s decision to resign from politics after he was ousted from power.

Meanwhile, Iran has called on the European Union to offset the effect of America withdrawing from the country’s nuclear agreement. Tehran’s Foreign Minister, Mohammed Javad Zarif, warned that Iran had drawn up several options if the EU failed to intervene in the dispute.

Speaking to German news magazine Der Spiegel, he said his country could “reduce its implementation” of the agreement and perhaps increase uranium enrichment activities. He warned the country would have no choice but to act if the current agreement was jeopardised by “the actions of the Americans and the passivity of the Europeans.”

Finally, India’s Finance Minister said the government was confident it would meet its fiscal deficit target. Arun Jaitley claimed the administration would achieve its objective of 3.3% of GDP, a day after unveiling a series of measures to counter the falling Rupee.

He said: “We will have a growth rate higher than what we’d projected earlier this year in the budget. The government is confident and will strictly maintain the 3.3% fiscal deficit target.”

India’s Rupee is currently Asia’s worst-performing currency. It has weakened by around 11% so far, amid turmoil in emerging Forex markets and higher oil prices.

TradeFred’s weekend roundup

Welcome to the latest edition of TradeFred’s weekend roundup, our review of the major news stories that took place while the markets were closed. This time, we look at the continuing fallout from the New York Times’ anonymous op-ed, Brexit headaches and the latest on the US-North Korean nuclear agreement – plus much more besides.

US roundup

The drama of the anonymous op-ed from the New York Times refuses to go away, with US Vice-President Mike Pence claiming he would take a lie detector “in a heartbeat” to prove he was not behind the article. He had been one of the front-runners in the “whodunnit” debate, due to the use of the word “lodestar” in the opinion piece.

Mr Pence also vouched for his staff members, stating that although he has not asked anybody if they were behind the story, he was “100% confident” they were not involved. Talking on CBS’ Face The Nation, he explained: “I know them. I know their character.”

Meanwhile, Bob Woodward, the author of an explosive book about Trump’s White House said he would not have published the story as it did not meet his standards. He claimed the article was “too vague”, saying he would have asked more questions of the author.  

Former White House chief strategist Steve Bannon claims the article amounts to a “coup”, claiming it was a “direct attack on the institutions”. Speaking to Reuters, he said: “There is a cabal of Republic establishment figures who believe Donald Trump is not fit to be president of the United States. This is a crisis.”

In other news, talks to reinstate the North American Free Trade Agreement (NAFTA) will rumble on, as America insisted that Canada must end its low-price milk proteins policy in order to facilitate a resolution. US Agriculture Secretary, Sonny Perdue, claimed the current practice was hurting his country’s dairy farmers. The issue appears to be one of the final sticking points between the two nations, as talks broke up on Friday without an agreement.

EU roundup

British Prime Minister Theresa May faced yet another weekend of turmoil in her ruling Conservative Party, which is hopelessly divided over her Brexit proposals. Former Foreign Secretary and leadership hopeful Boris Johnson attracted widespread criticism for claiming that the current plan was like “wrapping a suicide vest” around the country and giving the detonator to Brussels.

Allies of Mrs May and current ministers voiced their outrage at the comments, claiming that the UK needs to get behind the plans. Home Secretary Sajid Javid said the Chequers plan was the only one on the table with the European Union and it was up to Brussels to respond to it.

Meanwhile, Germany has said it has no interest in a “hard Brexit” – the term used to describe a scenario in which Britain leaves the single market and customs union. The country’s Foreign Minister, Heiko Maas, also said he did not want a hard border between Northern and the Republic of Ireland.

The border issue is thought to be one of the toughest problems facing negotiators at the moment. Michel Barnier, the EU’s chief negotiator, said he was willing to look at new ways to solve the deadlock.

In other news, support for the German Chancellor’s “grand coalition” of her conservative alliance and the Social Democrats (SPD) has hit a record low. A survey for the newspaper Bild am Sonntag revealed that approval ratings Angela Merkel’s Christian Democratic Union and their allies the Christian Social Union were down by one percentage point to 29%. The SPD was down two points to 17%. This combined score was the lowest for any “grand coalition”, which is the term used for a government consisting of multiple parties.

Greece has unveiled plans to cut taxes and increase spending as the country emerged from its bailout programme. Prime Minister Alexis Tsipras said the new policies would boost growth, but added he was still committed to the fiscal targets that were promised to creditors. Among the proposals was a reduction in corporation tax and an unpopular annual property tax.

Italian Prime Minister Giuseppe Conte once again tried to allay fears the populist government would try to remove the country from the single currency. He said: “I can assure you that we have never evaluated an exit from the Euro ... or the prospect of splitting from Europe.” Investors had been worried about a possible breakdown of the EU when the anti-establishment parties came to power.

Rest of the world roundup

North Korean leader Kim Jong Un has claimed his country is upholding the denuclearisation agreement he made with US President Donald Trump at their historic meeting in Singapore. The comments were made to an envoy of Chinese President Xi Jinping and released by China’s state broadcaster.

China’s Parliament Chief, Li Zhanshu, was apparently told by the North Korean leader that he hopes the US would stick to their side of the agreement. Talks between the enigmatic state and America appeared to have stalled over a lack of progress.

Meanwhile, Iran’s President Hassan Rouhani claimed that America is constantly trying to start up new negotiations between the two countries. Relations have soured dramatically since the US pulled out from a nuclear deal and re-imposed sanctions.

Mr Rouhani said: “From one side they try to pressure the people of Iran, on another side they send us messages every day through various methods that we should come and negotiate together.”

Finally, Australia’s coalition government is facing another embarrassing defeat in a state by-election. Voters apparently vented their anger over the forcing out of former Prime Minister Malcolm Turnbull, who was brought down from within his own party.

The electorate in Wagga Wagga, an agricultural part of new South Wales, caused a 29% swing against the ruling Liberal Party. The state’s Premier, Gladys Berejiklian, conceded defeat in a news conference, saying her party had heard the “strong message” delivered by voters.  This by-election had been seen as the first major test of new Prime Minister Scott Morrison following the backbench revolt that saw him depose Mr Turnbull.

The psychology of Forex trading

When it comes to developing your optimum Forex trading strategy, it can often be forgotten just how important psychology can be. The way you think and react can directly influence your investment decisions – in both good and bad ways.

In this blog, we will explore two important areas of trading psychology and the steps you can take to ensure they do not adversely affect your choices. These are dealing with emotions and overcoming boredom.

Controlling emotions

The most important thing to remember about your emotions is that you cannot simply switch them off. Instead, you have to learn to control them and not allow them to influence your decision-making. There are several ways in which your heart can rule your head, however each one can be overcome with the proper mindset and training.

Fear can be a particularly powerful enemy if you do not know how to control it. Whether you place a trade too early because you are afraid of missing out on potential profits, or open a position too late due to second-guessing your gut feeling – either scenario can have a negative effect on your capital. To combat this, make sure you thoroughly do your research and trust in your knowledge. By doing this, you will have a greater chance of making the right trade at the right time.

Another way your emotions can get the better of you by revenge-trading or trying to chase your losses. As we have explained before, sometimes making a loss is not always a bad thing, as it can help you learn from your mistakes and make better decisions in the future. In contrast, immediately trying to recoup your losses by making rash investments will likely only end in disaster.

For some people, the solution to combatting emotions is to not trade at all. While this may certainly help you not make hasty decisions, it could also mean you are losing out on legitimate investment opportunities. Instead, try approaching the situation as if you were a professional athlete before a major event. No matter what they have going on, they are able to put it out of their minds and focus on the task ahead. If you can adopt this mindset when it comes to trading, you will have a better chance of success.

Beating boredom

Online Forex trading can sometimes be perceived as glitzy and glamorous, though the reality is usually far from this. Just like all other careers, it can be monotonous at times – especially when the markets are quiet. If you are not able to control this, you could end up making bad decisions to try and liven things up.

Instead, you should try and shake things up in other ways – such as investing in new assets or trialling new techniques. Whatever you decide, you should always practice thoroughly with a demo account before you risk your own capital. Once you are confident, you can move on to your live account and challenge your newfound knowledge.

You can also combat boredom by joining trading groups or forums. These are great places to not only meet new people, but also benefiting from the knowledge of others and improving your strategy.

The final thing you can do is to ensure you take regular breaks to ensure trading does not become all-encompassing. Find other things that interest you and will take your mind of Forex for a while. By doing this, you can return to your account with a clear head and make better investment decisions.

Bitcoin falls off a cliff again as cryptocurrency slump deepens

Cryptocurrencies dropped sharply for the second time in less than 24 hours, sinking toward a nine-month low amid concern that broader adoption of digital assets will take longer than some anticipated.

Bitcoin, the largest cryptocurrency, tumbled as much as 9.8 percent and was trading at $6,422 as of 1:25 p.m. in Hong Kong, according to Bloomberg composite pricing. The Bloomberg Galaxy Crypto Index, a gauge of the largest digital assets, traded near its lowest level since November 2017 as rival coins Ripple, Ether and Litecoin also fell.

Cryptocurrency bulls who bet an expanding user base would drive up prices have faced a string of recent disappointments. Business Insider reported on Wednesday that Goldman Sachs Group Inc. was pulling back on near-term plans to set up a crypto trading desk, while trading platform ShapeShift AG said on Tuesday that it will begin asking users for personal information -- a policy that may drive away customers who value anonymity. The moves follow last month’s decision by U.S. regulators to reject another round of Bitcoin exchange-traded fund proposals.

“A lot of retail investors’ hopes for a bigger institutional presence were really being driven by Goldman Sachs,” Stephen Innes, head of trading for Asia Pacific at Oanda Corp., said by phone from Singapore. “This is just a negative, negative sign as far as liquidity goes.”

TradeFred's weekend roundup

Welcome to the latest edition of TradeFred’s weekend roundup, our look back at the important news stories that took place while the markets were closed. First, we will examine what happened in the US, followed by Europe and the rest of the world.

US news roundup

The Dollar held firm on Monday, benefiting from its status as a safe haven as investors took the impasse in U.S.-Canada trade negotiations as a bad sign for the even trickier talks between the United States and China.

The Dollar Index against a basket of six currencies (DXY) inched a tad higher to 95.163 as of 0325 GMT on Monday, building on gains made during the past two sessions.

The U.S. currency, widely seen as a safe-haven asset nowadays, usually gains in times of market turmoil and political tensions.

The USD/CNY pair gained 0.04% as the People's Bank of China (PBOC) set the yuan reference rate at 6.8347 vs Friday's fix of 6.8246.

The USD/JPY pair lost 0.2% to 110.91.

On Saturday, U.S. President Donald Trump said there was no need to keep Canada in the North American Free Trade Agreement and warned Congress not to meddle with the trade talks or he would terminate the trilateral trade pact altogether.

Trump on Friday had notified Congress of his intent to sign a bilateral deal with Mexico after talks between Washington and Ottawa soured.

Oil prices fell on Monday amid rising supply from OPEC and the United States, outweighing concerns that falling Iranian output will tighten markets once U.S. sanctions bite from November.

International Brent Crude Oil futures (LCOc1) were at $77.43 per barrel at 0222 GMT, down 21 cents, or 0.3 percent, from their last close.

U.S. West Texas Intermediate (WTI) Crude futures (CLc1) were at $69.62 per barrel, down 18 cents, or 0.3 percent, from their last settlement.

Meanwhile, U.S. drillers added oil rigs for the first time in three weeks, increasing the rig count by 2 units to 862.

The high rig count has helped lift U.S. Crude Oil production by more than 30 percent since mid-2016, to 11 million bpd.

European news roundup

Currently, the EUR/USD is flat-lined around 1.16 but could feel the pull of gravity in Europe if the spread between the Italian and German bond yield spread continues to widen.

The GBP/USD major pairing is near 1.2900 ahead of Monday's London market session as the Pound struggles to close the week's opening bearish gap from 1.2956, and rising Brexit tensions over the weekend see the Sterling in rough shape for the new week.

The European Union's lead Brexit negotiator Michel Barnier reversed recent goodwill rhetoric on the weekend, reminding broader markets that the EU is flat-out against the UK's latest Brexit proposal, and UK Prime Minister Theresa May was quick to fire back with shots of her own as both sides look set to double down on their stances as the clock slowly runs out of time in the run-up to the final Brexit deadline of March 2019.

European shares opened broadly flat on Monday as worries about U.S. trade policy and concerns over emerging markets weighed on stocks after Asian markets closed in negative territory.

London's FTSE 100 (FTSE) was the only trading center clearly in the black with a weaker pound and the latest Brexit uncertainty providing an accounting boost for British blue chips.

Italian banks were notable gainers rising despite the decision of Fitch rating agency to cut the outlook for Italy to negative on Friday.

Rest of the world news roundup

The Australian dollar fell on Monday after data showed retail sales were flat month-on-month in July while analysts expected a 0.3% growth.

The AUD/USD pair fell 0.2% to 0.7190, after hitting 0.7166 earlier in the day and hovering near a 22-month low.

Data from the Australian Bureau of Statistics revealed on Monday that July retail sales were flat, following a 0.4% gain in June. clothing and footwear sales led declines with a 2% fall and household goods retailing faltered 1.2%.

The decline in the Aussie dollar came ahead of the Reserve Bank of Australia’s September meeting, in which the central bank is widely expected to keep its overnight cash rate at the record low of 1.50%. 

Meanwhile, The NZD/USD pair fell 0.2% to 0.6608 as analysts look ahead to Reserve Bank of New Zealand’s next meeting on September 27. Earlier reports suggested that the central bank may be ready to trim its benchmark rate.

Asian stocks edged down in morning trade on Monday after the U.S. and Canada failed to reach an agreement on trade last Friday, although the two nations are likely to continue negotiations this week.

China’s currency is set to take an increasing share of world foreign-exchange reserves, with the dollar and yen having to make the most room proportionally for the newcomer on the block, according to Goldman Sachs Group Inc (NYSE:GS).

An acceleration in foreign inflows into Chinese fixed income in recent months -- despite a tumble in the yuan -- has showcased the power of allocation demand for the world’s No. 3 bond market.

Central banks will probably account for $250 billion of an estimated $1 trillion of net inflows into Chinese bonds in the five years through 2022.

Elsewhere, Australia’s S&P/ASX 200 rose 0.1% while South Korea’s KOSPI fell 0.6%.

Eurozone inflation down to 2.0%

The euro slipped lower against the U.S. dollar Friday as a closely-watched measure of currency area inflation missed analysts' forecast in a reading that could have significant implications for U.S. interest rates.

Eurostat, the region's official statistics office, said consumer prices around the 19 countries that use the European single currency accelerated by an annual rate of 2% in August, modestly faster than the European Central Bank's 'just below 2%' target but down from a 2.1% reading in the previous month. So-called core inflation, however, which strips out volatile prices for food and energy, as well as state-controlled alcohol and tobacco products, was estimated at 1%, down from a reading of 1.1% in July and just shy of economists' forecasts.

The reading pushed the euro around 0.05% lower against the U.S. dollar at 1.1663 immediately following the release, as investors worried that slowing growth in the region would tame consumer prices and potentially delay the interest rate hikes signalled by the ECB for September of next year.

However, if inflation were to slow even moderately over the next few months, while investor concern over the looming fiscal showdown between Italy and European Union officials in Brussels intensifies, investor moves into safe-haven assets outside of the Eurozone could hold down U.S. Treasury bond yields and complicated the Federal Reserve's own plans to raise interest rates in the months ahead.

Benchmark 10-year German bond yields, a proxy for risk-free interest rates in the Eurozone, were marked at 0.358% Friday, giving investors the chance to take a stronger currency (one euro buys 1.16 U.S. dollars) and purchase 10-year Treasury notes that yield 2.85%. That's a 2.492% return swing into one of the world's most liquid markets adds no risk to a particular portfolio.

The attraction of that trade was party on display earlier this month, when Treasury International Capital data showed a net increase in foreign purchases of U.S. assets neared $420 billion in the second quarter, with June inflows of $114.5 billion.

New trade conflict brews as Trump threatens to pull out of WTO

US President Donald Trump’s protectionist agenda continued apace on Thursday, as he sets his crosshairs firmly on the World Trade Organisation (WTO). In an interview with Bloomberg, he warned he would withdraw the country from the body if it does not treat America better.

The WTO was set up to act as an arbitrator for global trade and resolve any disputes. Mr Trump has repeatedly attacked the organisation, saying the US is treated unfairly and that the 1994 agreement to establish the body was “the single worst trade deal ever made”.

Speaking from the Oval Office, the President said: “We rarely won a lawsuit except for last year. In the last year, we’re starting to win a lot. You know why? Because they know if we don’t, I’m out of there.”

While data from the WTO reveals that countries who bring complaints to the organisation tend to win and defendants tend to lose, Mr Trump has been relentless in his criticism of the body. He argued that the current system is broken and badly needs an overhaul.

That being said, the US is still submitting complaints to the organisation against other members. Just this week it began a case against Russia for implementing fresh duties on American products – something the US says is illegal.

America has also been routinely blocking the appointment of judges to the WTO’s appeals body, something that could end up stopping the organisation from issuing judgements. The US Trade Representative Robert Lighthizer has accused the disputes system of interfering with the country’s sovereignty – especially when it comes to anti-dumping cases.

Market analysts worry that a US withdrawal from the WTO would have a serious knock-on effect for the global trade. In fact, they believe it would do far more damage than the country’s escalating dispute with China.

A war on many fronts

President Trump’s threat to withdraw from the WTO is the latest episode of his ongoing battle for trade supremacy. He has already slapped punitive tariffs on many nations, including China, Iran and the European Union.

In one of his first acts since becoming President, he also withdrew the US from the Trans-Pacific Partnership (TPP) – a multi-national agreement that had been a serious part of President Obama’s Asia policy. Mr Trump said the deal was “a potential disaster” for America, though he said he might consider re-joining if the terms were “substantially better”.

Meanwhile, the US is currently embroiled in talks with neighbour Canada, in a bid to reform the North American Free Trade Agreement (NAFTA). The discussions come as America and Mexico reached an accord earlier in the week. President Trump has threatened to tax the Canadian automotive sector if no deal is made by the end of Friday.  

More concerns for emerging markets as Argentina seeks loan release

The turbulence surrounding emerging currency markets intensified on Wednesday as Argentina approached the International Monetary Fund (IMF) for the early-release of a loan. The country has been engulfed in an economic crisis, with inflation running wild.

Argentina’s Peso has tumbled by more than 40% this year alone against the US Dollar, with investors concerned that the country may end up defaulting on its government debts. Its President, Mauricio Macri, claimed the move was to restore confidence in the ailing economy.

The bailout, worth $50 billion, was first requested in May – after the Peso hit an all-time low. The country has also struggled to control inflation, which is the highest amongst all the G20 nations. In addition, its government has so-far failed to action the economic reforms that it promised the IMF.

Christine Lagarde, the IMF’s Managing Director, said: “I stressed my support for Argentina's policy efforts and our readiness to assist the government in developing its revised policy plans.” She has reportedly instructed her staff to work with Buenos Aires to re-examine the planned distribution of funds.

President Macri also commented on the situation, saying: “Over the last week we have seen new expressions of lack of confidence in the markets, specifically over our financing capacity in 2019. We have agreed with the International Monetary Fund to advance all the necessary funds to guarantee compliance with the financial programme next year.”

Argentina is far from the only emerging market to be struggling. Turkey has hit the headlines several times over the past few months, with the Lira plunging in value versus the USD.

Turkey has been embroiled in a bitter dispute with America over the detention of an evangelical pastor and is facing tough economic sanctions. Investors are also worried about the independence of the country’s central bank – with President Recep Tayyip Erdoğan reportedly trying to influence monetary policy.

Relief for Sterling as Brexit worries ease

British Pound bulls received some long-awaited relief, as the EU sent its clearest message yet that it would work to prevent a ‘no deal’ Brexit scenario. Long traders have been battered in recent months by wave after wave of stories that indicated Britain would tumble out of the political union without securing an agreement.

Those fears might have been somewhat eased on Wednesday, as the EU’s chief negotiator Michel Barnier appeared to suggest he was close to agree. He said: “We are prepared to offer Britain a partnership such as there never has been with any other third country.”

Mr Barnier’s optimism helped trigger a surge in Sterling, taking it to its highest level for weeks. The Pound jumped beyond the psychologically-important $1.30 mark. It also rose slightly against the Euro.

At a news conference in Berlin, Mr Barnier added that the EU respected the ‘red lines’ set out by the UK “scrupulously”. However, he warned that “in return, they must respect what we are. Single market means single market. There is no single market a la carte.”

That final comment mirrored British Prime Minister Theresa May’s often-repeated mantra that “Brexit means Brexit”. While this may have been a slight dig at the embattled leader, his overall message is likely to offer some well-needed respite.

Indeed, this optimism was extended further when French President Emmanuel Macron reportedly indicated he would push fellow EU leaders to agree a Brexit deal. He is expected to use next month’s EU summit in Austria to arrange a special partnership with the UK.

According to British newspaper The Times, Mr Macron “sees a no-deal scenario as something that would break links and poison relations at a time when Europe needs to be united beyond the EU.” He does, however, believe that any agreement should not damage the union’s overall integrity.

It was not all plain sailing for Britain though, as Japanese tech company Panasonic announced it would move its European headquarters from the UK to Amsterdam in October. The firm indicated this was to avoid potential tax issues that could arise when Britain leaves the EU next year.

Panasonic is the latest multinational company that is moving its European base out of Britain. Financial firms such as Daiwa and Nomura have already indicated they will be relocating.

Sterling was down slightly against the USD as of 08:57 GMT, although still just above the important $1.30 level. It was a shade higher versus the single currency and down by 0.37% compared to the Japanese Yen.

Oil slips on rising U.S supply

Oil prices slipped on Wednesday, pulled down by a rise in U.S. inventories and hopes that new investment could halt a plunge in Venezuela's output.

Traders said reports of potential investment in Venezuela's struggling oil production also affected markets.

Venezuelan crude exports have halved since 2016 to below 1 million barrels per day (bpd).

To stem tumbling output, Venezuelan state-run oil firm PDVSA said on Tuesday it had signed a $430 million investment agreement to increase production by 640,000 bpd at 14 oilfields, although some analysts doubted whether this investment would go through given the instability in the country.

Despite the risk of disruption, especially from OPEC-countries like Venezuela, Iran, Libya and Nigeria, Bank of America Merrill Lynch (NYSE:BAC) said global supply could climb towards the end of the year. Adding to that will be new production in Canada, Brazil and the United States.

Despite prospects of rising supplies, traders said crude markets remained relatively tight, largely because of the prospect of U.S. sanctions against Iran, which will start to target its oil industry from November.

Bowing to pressure from Washington, many crude buyers have already reduced orders from Iran, OPEC's third-biggest producer.

Although Tehran is offering steep discounts, Iran's August crude oil and condensate loadings are estimated at 2.06 million bpd, versus a peak of 3.09 million bpd in April.

Benchmark Brent crude oil (LCOc1) was $69.03 a barrel by 13:00 GMT.

U.S. crude inventories rose by 38,000 barrels to 405.7 million barrels in the week to Aug. 24, the American Petroleum Institute said on Tuesday.

Iran contemplates digital currency to combat US sanctions

Iran is reportedly in the final stages of launching its own state-backed cryptocurrency in response to American sanctions. The country’s Informatics Services Corporation (ISC) has released details about the digital currency, which is rumoured to be released as early as next month.

The token will be backed by the Rial and has been developed by the ISC using Hyper-ledger Fabric Platform technology. It will be issued by the Central Bank of Iran, which will have the final decision on the volume of currency that will be released. Because it has been developed using private blockchain infrastructure, it will not be available for mining.

The announcement comes as the Deputy for Innovative Technologies at the country’s central bank stated that its financial regulator will be reviewing its blank ban on cryptocurrencies. Nasser Hakimi indicated that a repeal is likely to happen at some point in September.

Mr Hakimi did acknowledge, however, that state-sponsored digital tokens have not yet caught on with the public. He said: “National virtual currencies haven’t proved successful experiences in the world, but some economic officials have emphasized on this, so the Informatics Services Corporation has readied a test edition and some other entities are also cooperating in this.”

This comment was likely in reference to Venezuela’s effort to bypass US sanctions by releasing a digital token. Earlier this year, the country released the Petro – an oil-backed cryptocurrency that has so-far failed to gain much traction. Its efforts have also been hampered by US President Donald Trump, who signed an executive order in March banning American citizens from purchasing the token.

Cryptocurrencies have had mixed reactions to the news. While all four main tokens did rise initially, only Bitcoin and Ripple could hold onto their gains, with Ethereum and Litecoin falling back.

As of 09:20 GMT, Bitcoin was up by 0.23% at $6,931.56 and Ripple was 1.45% higher at $0.3436. Ethereum was down by 1.056% and Litecoin 0.84% lower at $285.02 and $60.18 respectively.