The results of the second summit devoted to the winding down of the North Korean nuclear program have become known today. As the White House said, US President Donald Trump and North Korean leader Kim Jong Un failed to reach a general agreement. All the statements made by Trump the day before that the two leaders managed to build excellent relations remained unheard by the leader of North Korea.
In his twitter, Trump wrote that the meeting with Kim Jong-un was productive, but for the time being, it would be wrong to sign anything. Trump also noted that he is committed to long, but productive negotiations, which, ultimately, will lead to the signing of a joint agreement that suits both parties.
The main obstacle at the end of the negotiations was trading sanctions, which the United States maintains against North Korea. However, one of the advantages is the fact that the North Korean leader Kim Jong-un is ready to give up nuclear weapons.
As for the next meeting, there are currently no arrangements for additional summits with North Korea.
Meanwhile, the European currency continues to strengthen its position, despite the fact that many economists expect the European Central Bank at the next meeting to be held next Thursday, will announce the start of a new round of long-term targeted refinancing operations TLTRO. This will mitigate concerns about the need to refinance cheap loans, as well as preserve the soft lending conditions, which many investors and traders fear.
Given the risks of trade and political conflicts, along with weak macroeconomic statistics, the slowdown in the economic growth of the eurozone and its recession seems more real than before.
All this suggests that the ECB may even postpone the increase in interest rates for the next year, which in the medium term will weaken the position of the European currency or limit the upward correction in a pair with a weaker, for almost the same reasons, US dollar.
Today, data came out that showed that consumer spending in France in January of this year increased by 1.2% compared with December 2018, and by 1.0% compared with the same period last year. Economists had forecast growth in consumer spending by 0.5% and 0.1%, respectively.
Inflation in France is not so good. According to preliminary data, the consumer price index in February remained unchanged compared with January and grew by 1.3% year on year. France's preliminary CPI in February was forecast at 0.4%.
The preliminary consumer price index in Italy in February rose by only 0.2% and 1.1% per annum, which fully coincided with economists' forecasts.
In the afternoon, reports are expected on inflation in Germany, as well as the US GDP for the 4th quarter of 2018, which could significantly affect the EURUSD pair. If inflation in Germany remains stable, and US GDP turns out to be worse than forecast, then the demand for risky assets may increase substantially, which will lead the trading tool to update the highs of 1.1440 and 1.1460.
With a scenario of good performance in the growth rate of the American economy, and initially, they will be worse than in the 3rd quarter, the demand for the dollar may return, which will pull the EURUSD pair down to support levels of 1.1380 and 1.1340.
The material has been provided by InstaForex Company - www.instaforex.com