US President Donald Trump will meet with Chinese President Xi Jinping between 6th and 7th April, and the meeting is expected to be a fiery one. Discussions between the two are expected to cover bilateral trade agreements and the issue of North Korea, and Trump has previously criticised China of holding unfair trade policies. Over the weekend Mr Trump said that the US would take control of the nuclear threat from North Korea, with or without the help of China.
He said that Jinping has the power to influence Korea as 90% of their trade is done with China, and that it would be the most sensible option to cooperate with the US on this topic. Intelligence from South Korea points towards a sixth testing of nuclear bombs expected to take place this week to overshadow the meeting with the two Presidents.
Details from this meeting are likely to cause a large amount of volatility for the USD. If they are unable to reach a mutual agreement, or if the meeting doesn’t go the way Trump is expecting it to, further doubts over the future for the US could weigh on investor’s minds, making it cheaper to buy US Dollar as a result.
Yesterday, US Manufacturing activity showed a fall in March compared to February due to a decline in production, although this figure was still better than expected.
The ISM (The Institute for Supply Management) also released their Purchasing Managers index which covers future production expectations and new factory orders, and provided a reading of 70.5, far better than February and beat expectations.
Construction spending in February also rose close to an 11 year high, and the Dollar gained against all of its counterparts as a result of the positive news.
The beginning of a new month brings a whole host of economic data for the US. This afternoon will see the release of Trade Balance data determining the balance between US Imports and Exports, followed by Factory Orders for February at 3pm. Tomorrow afternoon from 1.15pm will show Employment data, Services and Non-Manufacturing PMI, with the most important FOMC Minutes released at 7pm.
This week will be busy for US Dollar exchange rates, and those with a US Dollar buying or selling requirement may be prudent to get in touch with us sooner rather than later. Call our trading floor on 01494 725 353 or email me here if you’d like to discuss your requirement.
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