Trade Wars Latest: Concerns About NAFTA, China Dominate USD
USD price, news and analysis:
- The trade dispute between the US and China is weakening confidence in the US Dollar.
- Detail of the NAFTA deal between the US and Mexico are scant, and trade relations between the US and Canada are poor.
Our trading forecasts for Q3 have been published; you can find the USD and EUR guides here.
And check out the IG Client Sentiment data to help you trade profitably.
Trade tensions may weaken USD sentiment
Concerns about the trade wars between the US on one side and Mexico, Canada and China on the other have eased a little but will likely remerge soon to keep the USD on a downward track.
There are three principal concerns:
- Details have not yet emerged about the trade deal between the US and Mexico. Anyway, it could be stalled by Congress and an actual agreement could still be months away,
- Canada has rejoined the three-nation North American Free Trade Agreement (NAFTA) talks but little progress has been made so far, and
- A deadline for the next round of US-China tariff talks next week is fast approaching.
For now, EURUSD is off its highs, with USD helped by optimism following the news of the US-Mexico deal. However, reemerging doubts could well bolster the pair and send it higher still.
EURUSD Price Chart, Daily Timeframe (May 22 – August 29, 2018)
News that the US trade deficit in goods widened to $72.2 billion in July will likely strengthen the determination of US President Donald Trump to take a hard line in the negotiations with its trading partners – and that will likely ensure that the EURUSD uptrend resumes soon.
More to read:
Resources to help you trade the forex markets
Whether you are a new or an experienced trader, at DailyFX we have many resources to help you: analytical and educational webinars hosted several times per day, trading guides to help you improve your trading performance, and one specifically for those who are new to forex. You can learn how to trade like an expert by reading our guide to the Traits of Successful Traders.
--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.