The U.S. stock markets opened with a positive gap on Tuesday, now trading at an ATH at $3433. Bitcoin and Gold, on the other hand, dropped 3.1% and 0.53%, respectively. The price of Bitcoin [BTC] at 15: 30 hours UTC on 25th August 2020 is $11,370.
The United States and the European union passed an agreement (in talks since 2018) to bolster trading between the two nations. The agreement to reduce tariffs between the EU and the United States will be mutually beneficial to the economies of both countries.
These tariff reductions are the first U.S.-EU negotiated reductions in duties in more than two decades.
On the more significant, Chinese front, positive tidings for the economies came with the escalation of talks on the implementation of Phase One Agreement. China’s Vice Premier Liu He held talks with the U.S. counterpart Steven Mnhuchin and Ambassador Lighthizer on the matter on 24th August.
The final statement of the announcement of the call says,
Both sides see progress and are committed to taking the steps necessary to ensure the success of the agreement.
Japan and the U.K. also reached an agreement yesterday on a ‘free trade agreement’, pending ratification next week.
Fingers Crossed for Thursday
On Thursday, Jerome Powell, the Federal Reserve Chairman of the United States will give a speech at the annual conference in Jackson Hole, Wyoming. His announcement will cater to targeting “Average inflation”; it implies, allowing inflation to run higher than normal for a period of time.
During times of high inflation, gold has performed well in the past. Hence, the contiuation of current trends point at a positive reaction from the market. Nevertheless, the market already seems to be pricing in all the information. Despite inflation worries, economic recovery seems to be taking precedence over ‘risk-off’ assets.
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