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By xemarketanalysis January 31, 2019 2:32 pm
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    XE Money Transfer: Pound Rises to Highest Point in a Year, Dollar Sinks on Dovishness


    • Sterling hits a year-long high point as PM May and her team prepare to head back to the negotiation table with EU Chief Negotiator Barnier and EU leaders. 
    • USD steadies after The Fed keeps rate hikes on hold in the frigid day before February
    • Oil up, yet Canada's November GDP was down by the predicted 0.1% 


    It's difficult to predict who will blink first on the Brexit front. British PM Theresa May plans to return to Brussels to press the topic of the Irish border with EU Chief Negotiator Michel Barnier. EU leaders seem determined to stand their ground and are prepared to wait until after the next vote in the British parliament on February 14th. They may wait until the next EU summit, which is only a week before the March 29th scheduled Brexit date. Surprisingly, the pound is in fine form against other major currencies.  


    Fed Chair Jerome Powell said the case for raising interest rates has weakened somewhat of late during FOMC meetings. As the US-China trade discussions continue under the dark cloud of Huawei charges, Presidents Trump and Xi are rumored to meet in February, possibly around the time he meets with Kim Jong-un. USD EUR is down to 0.87375 after falling from 0.87599 in today's trading. 


    PM May shouldn't expect a warm welcome from European Commission Jean-Claude Juncker and his team. Juncker says the existing agreement will not be negotiated, and it is the only deal possible. EU officials are concerned that May has set the UK on course for a no-deal exit at the end of June, though they don't plan on visiting with her until the next EU Summit on March 22nd and 23rd. 


    The euro is experiencing significant selling after Bundesbank President Jens Weidmann said Germany will experience a lengthy economic slump. The EUR USD pair closed at 1.144 after touching a high of 1.151 in early trading. 


    CAD has risen strongly in January until today and is buoyed by rallying crude oil prices. OPEC has cut production and Venezuelan oil are being sanctioned which makes Canadian crude seem like a sweet deal. 


    US Trade talks seem to have produced little except to tee up a meeting in late February between Presidents Xi and Trump. USD AUD dipped in midday trading to 1.37184 but recovered and now sits at 1.37716. This does not bode well for the Aussie dollar or the Chinese construction industry. 


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