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Will currency markets be risk on going into next week after the G-20 summit?


Guest Sam Bouman

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After the positivity from the G-20 summit in Osaka, Japan especially the developments in the meeting between Xi and Trump and the decision to restart negotiations on a trade deal between the two countries I believe we could see a risk on environment in currency markets going into next week.

The reason for this is that the worries regarding further escalations in the trade war will ease due to the US not adding any further tariffs and also now allowing US companies to sell to Huawei which had been at the centre of the trade war for a long time. 

Another reason is that the EU has now set up a channel for them to resume the previous deal agreed with Iran and by doing this they will still avoid US sanctions, this could bring the tensions with Iran down as if they still comply by the original deal agreed then there will be no reason for them to continue their uranium enrichment program, again easing the fears they will be working towards nuclear weapons.

All these issues easing should enable investors to invest in risk on currencies such as the Australian dollar and move their money away from safe haven assets. 

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