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US Dollar Ends Week Strongest as US-China Tensions Deescalate

August 31, 2019 at 21:26 by Vladimir Vyun

The US dollar ended the week as the strongest currency on the Forex market, though commodity currencies like the Australian and Canadian dollars (but not the New Zealand dollar) were following close behind. The developments in the US-China trade conflict was one of the main drivers for the market during the week.

The week started with the news that China wants to renew trade talks, though Chinese officials denied that they have reached out to Washington with an offer of negotiation. Markets reacted positively to the news, maintaining largely positive sentiment throughout the week. Traders mostly ignored criticism of the Federal Reserve and its interest rates by US President Donald Trump. In fact, the CME FedWatch page shows that the probability of an interest rate cut in September is no longer at 100%, though it is still extremely high.

As for other currencies and important events concerning them, the Canadian dollar got a boost a good GDP print. The Great Britain pound was soft after British Prime Minister Boris Johnson made a motion to suspend the parliament.

EUR/USD sank from 1.1150 to 1.0989 over the week. GBP/USD declined from 1.2268 to 1.2163. USD/CAD closed at 1.3305, close to the opening level of 1.3292, after falling to the low of 1.3225 over the week.

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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