U.S. Dollar tumbles along with trade woes
NOVEMBER 18, 2019
The U.S. Dollar continued to weaken for the third day in a row as the globe continues to weigh disappointing economic data and pessimism over the timeline of a Phase One agreement between the U.S. and China on trade.
Traders and investors are concerned about the negative effects of prolonged uncertainty over tariffs as well as the inability for central banks to stimulate much with policy. Nevertheless, do not expect the buck to strengthen as a safe-haven asset since recent figures point at a slowdown domestically.
No major data until the end of the week means we will stay on watch mode for anything that clarifies a solution to trade concerns. With less than a month left until elections in the United Kingdom, there will be plenty of hectic back-and-forths that could spark volatility in rather dull markets that have reached record highs. With less than six weeks left for the year, we keep our belief in a weaker greenback.
What to Watch Today…
- No major events scheduled for today.
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The Euro recuperated its momentum last week and has been climbing back following a week of less disappointment than expected. Data figures from Germany, France, and Italy pointed at less contraction and even Industrial Production managed to expand a little overall for the bloc. It is possible that stimulus in China, potential solution the Brexit question, and a Europe in recovery could make quite the mix for dollar depreciation as the year ends.
The Pound Sterling popped over half a percent higher against the U.S. dollar overnight after a poll showed that Prime Minister Boris Johnson held a sizable lead over his rivals. Johnson looked to boost his chances by offering businesses a tax break as an olive branch for the uncertainty that Brexit has caused.
The Sterling also got a boost after Johnson said that Conservative candidates have pledged to back his Brexit Deal. As a result, the sterling is up for a fourth straight day which represents its best run in a month. GBP/USD is at the highest level since October 22.