Last week, there were sharp swings in USDJPY, a decline in oil prices, and a surge in Tesla stock. What's next?
Greenback inches up on expectations for US-China trade negotiations
On Monday, the evergreen buck rallied versus a group of currencies, underpinned by hopes for trade negotiations that traders expect to relieve tensions between China and America.
Estimating the purchasing power of the US currency against its key rivals, the USD index rallied by 0.1% hitting 96.11 having dived by approximately 0.5% on Friday, which is the greatest losing day in nearly a month.
Escalating tensions between America and its trading partners, combined with a currency meltdown in Turkey brought the evergreen buck to 14-month maximums the previous week.
The greenback’s surge stalled ahead of expected trade negotiations between American and Chinese officials in the US capital in the coming days. Receding worries over the fallout from the Turkish currency’s recent selloff also relieved risk aversion, thus affecting US dollar demand.
On Monday, market sentiment toward Turkey managed to stabilize, with Turkey’s currency standing still sticking with the 6 lira to the greenback level. By the way, Turkish financial markets were unavailable due to holidays for the week.
The common currency went down versus the firmer greenback. The currency pair EUR/USD slumped by nearly 0.18% hitting 1.1416, which still appears to be above last Wednesday’s 13-month sink of 1.1300.
The evergreen buck rallied versus the Japanese yen. The currency pair USD/JPY added by up to 0.13% hitting 110.64 having slumped by 0.36% on Friday.
In addition to this, market participants were looking ahead to Wednesday’s minutes of the key US bank’s August gathering, when it left interest rates on hold and stressed that it’s still on track for extra rate lifts in 2018.
Market participants are going to be on the lookout for any changes in the Federal Reserve’s outlook on inflation as well as the trade war and economy worries.
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.