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.
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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.
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--- Written by Martin Essex, Analyst and Editor
Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex
