US China talks have been a major driver for the value of the USD recently. Talks between the two largest economies in the world have been ongoing but took a U-turn last week when President Trump suggested that China has gone back on agreements. This resulted in the US government confirming further tariffs on $300 billion worth of imported goods imported from China which could then be imposed at the end of next month. The Chinese government announced retaliatory tariffs on $60 billion of imports from the US.
|Currency Pair||% Change (Month)||Difference on £200,000|
Trade talks have generally been adding to the USD's value as investors move towards the USD as a safe haven. It has also been suggested that as the US economy starts building more at home, its economy will grow as a result. Globally the US is forecasted to grow at a much faster pace than most developed countries and even as global interest rate hikes slow, the US remains higher than most which is a further incentive for investors to buy the USD.
USD/EUR interbank rates reached a near 2 year high in yesterday’s market for the second time in a month and a major level of resistance at just under 0.90. If broken, the view held by many seem to suggest the gains could be significant for the USD, it has however rebounded steeply from this level on several occasions before so the next few trading sessions are very important for anyone with a USD/EUR trade.
There is a host of economic data being released for the US this week. Existing home sales is released this afternoon which is expected to show a further expansion of activity. The Federal Open Market Committee (FOMC) minutes are also released tomorrow afternoon which is expected to be keenly watched as the battle between the Federal Reserve Bank (Fed) and government on future interest rate policy heats up. On Thursday, manufacturing orders are released for the US and on Friday Durable Goods Orders, again both are expected to show an expansion which could result in a further gain for the USD against both the UK pound and the euro.
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