Yen on defensive

The safe-haven Japanese yen sagged on Tuesday, as optimism that the United States and China could begin negotiations on trade helped ease concerns about a trade war, bolstering demand for riskier assets. Global markets were shaken last week after U.S. President Donald Trump moved to impose tariffs on Chinese goods, sparking fears of a trade war between the world’s two largest economies, but latest reports indicated a slightly more calibrated approach. Chinese Premier Li Keqiang said on Monday it and the United States should maintain negotiations, reiterating pledges to ease access for American businesses. Emerging market currencies had gained ground on Monday, as growing optimism that the United States and China will soon begin negotiations on trade, eased fears of a global trade war.

Crude oil backed down from a two-month high as mounting political tensions and outright conflict in the Middle East, the world’s biggest crude-producing region, failed to disrupt supplies. Russian assets were hit on Monday as the U.S. and more than a dozen European nations announced a swathe of diplomatic expulsions in response to the poisoning of an ex-spy in the U.K. In view of Easter Holiday, the price action and volatility should remain in low to moderate levels this weeks, as liquidity will probably be reduced later this week. The economic calendar comes with only a few economic events, a relative light economic calendar with main economic data in the European and American Session. A low to moderate volatility and price action is expected today.