Last week, there were sharp swings in USDJPY, a decline in oil prices, and a surge in Tesla stock. What's next?
Evergreen buck reaches fresh 4-month peak
On Monday, the evergreen buck reached a four-month maximum versus the Chinese yuan, although it was lower against the Japanese yen as well as Swiss franc due to the fact that the escalating trade conflict between China and America backed bids for ‘safe-haven’ assets.
The evergreen buck managed to hit 109.73 yen, sliding about 0.2% from late Friday, and having slumped to 109.60 overnight. It turned out to be a bit higher than the three-month minimum that the currency pair reached on Friday as a fresh round of American levies on Chinese imports came into effect.
The greenback reached a fresh four-month maximum versus the Chinese yuan of 6.8654 overnight.
Over the weekend, American leader initiated a process to have tariffs on all remaining untouched Chinese goods levied 25%, although the two leading economies kept negotiating, avoiding an all-out breakdown of the negotiations.
As some financial analysts pointed out, it was quite logical that any deal to have the dispute clarified is going to be postponed and global surge in the second quarter could be affected.
It represents a considerable change compared to market hopes for a deal signed this week. In fact, trade uncertainty doesn’t appear to be the market’s friend, and this makes investors take a more cautious stance in the nearer future, notwithstanding the better economic data of late.
Gauging the evergreen buck’s purchasing power versus its six key rivals the USD index hit, standing still from Friday due to the fact weakness against safe havens was compensated by a tumble versus risk proxies such as the Australian and Canadian dollars.
Geopolitical factors and inflation remain the main drivers of financial markets. Let’s see how to use that in trading!
Have a look at the key financial instruments on Monday, February 28. Geopolitics is currently on all news frontlines. Western nations escalated sanctions on Russia for the invasion of Ukraine.
The US Bureau of Economic Analysis will publish Core Personal Consumption Expenditures (PCE) on May 27 at 15:30 GMT+3.
The United States will publish the Preliminary GDP on Thursday, May 26, at 15:30 GMT+3.
The Reserve Bank of New Zealand will publish a monetary policy report and make an update on the interest rate on May 25, at 05:00 GMT+3.