FXTM information and reviews
FXTM
95%
OctaFX information and reviews
OctaFX
94%
XM information and reviews
XM
93%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
90%
HFM information and reviews
HFM
89%

Are political risks driving USD higher?


11 February 2019

The negative mood sweeping across financial markets late in the trading week continues to highlight how investor sentiment remains extremely sensitive to any changes in the narrative with US-China trade developments.

Global equities got up on the wrong side of the bed today after Donald Trump said he would not meet with Chinese President Xi Jinping before the March 1 trade deadline. This unfavorable development has certainly raised concerns over trade talks dragging on beyond the 90-day tariff truce. With geopolitical risks and fears around faltering world growth already leaving global sentiment on edge, there is a high risk that there could be another sell-off in the markets if the United States once again increases tariffs on Chinese goods early next month.

It is expected that investors will be watching US-China trade headlines very close to their radars for the remainder of February. With all the ingredients for another round of a stock market selloffs in place, equity bears are seen jumping back into the scene if US-China trade talks do take a turn for the worst.

The other trend that is keeping traders on their toes is the gradual recovery of the US Dollar that has taken place over recent trading sessions. It is difficult to pinpoint what exactly is driving the USD recovery, but I wouldn’t bet against investors bracing themselves for another potential escalation in trade tensions following the comments in recent days. Another possibility is that investors have realized that even if the Federal Reserve does push the snooze button on higher interest rate policy in the United States, monetary and economic divergence is still in favour of the U.S than a number of its developed peers.

Let’s put it this way: a diplomatic spat between France and Italy is making its way across the major news headlines at the same time as when investors are still no way near understanding at all what is going to happen with Brexit in the run up to the March 29 Article 50 deadline, so it is quite possible that investors will prefer to have the USD in their portfolio until the necessary guidance is provided for what could happen with either the Euro or the British Pound over the coming weeks.

Share:


Related

The Downfall of Euro in 2022: the Analysis of its Reasons, the Current Situation, and the Objective Forecast
The Downfall of Euro in 2022: the Analysis of its Reasons, the Current Situation, and the Objective Forecast

Before getting down to analyzing why Euro reminds of a mafia victim in cement shoes falling off a Chicago bridge, allow us to open it up with a meme joke that best describes this whole ordeal...

31 Oct 2022

XAU/USD juggles around $1,710 as investors await US NFP
XAU/USD juggles around $1,710 as investors await US NFP

Gold price (XAU/USD) is displaying topsy-turvy moves in a narrow range of $1,709.35-1,713.42 in the early European session. The precious metal is displaying a lackluster performance...

7 Oct 2022

Positive mood stalls on the “pivot” trade
Positive mood stalls on the “pivot” trade

USD slid against most of its major peers. The DXY closed a tick above its lows of 110.05. Resistance is at 110.76 while next support is 109.29. GBP gained for a sixth session in a row, a winning streak not seen since April 2021...

5 Oct 2022

OctaFX glances at current economic shifts - the good, the bad, and the strange
OctaFX glances at current economic shifts - the good, the bad, and the strange

Pandemics and health crises, political tensions, geopolitical tension flashpoints popping up, Western sanctions on significant European and Asian economies, and grave tensions between...

3 Oct 2022

The Euro rebounded from the low
The Euro rebounded from the low

After updating its multi-year lows again, the major currency pair rebounded. The current quote for the instrument is 0.9656. Last night, the local interest in risks improved a bit, helping the asset to successfully correct...

29 Sep 2022

Gold Shows Signs of Life, But Heads Towards Another Losing Month
Gold Shows Signs of Life, But Heads Towards Another Losing Month

The precious metal is largely considered as a hedge to inflation, but it has not confirmed this status during the current year. It did kick it off with a rally, but as the Fed begun hiking rates back...

28 Sep 2022


Editors' Picks

IronFX information and reviews
IronFX
88%
FXCM information and reviews
FXCM
87%
NordFX information and reviews
NordFX
85%
MultiBank Group information and reviews
MultiBank Group
84%
Vantage information and reviews
Vantage
83%
FP Markets information and reviews
FP Markets
81%

© 2006-2022 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.