Forex Preview: USD Surges on Renewed Trade Optimism

Google+ Pinterest LinkedIn Tumblr +

1. Forex Preview: USD Surges on Renewed Trade Optimism

The US dollar surged higher against key rivals as the urgency for a Fed rate cut was reduced by the latest positive developments on US/China trade relations. The greenback added more than 0.75% against the safe haven Swiss Franc as of 7:45 GMT this morning. The USD/JPY and the USD/NZD also added 0.5 percent as of 7:45 GMT. Elsewhere, the EUR broke out of its stuck range to the downside and could be heading towards testing the 1.13 level now.*

 

2. EU Markets Open Higher

On Monday European bourses surged at EU open as U.S. President Donald Trump and Chinese President Xi Jinping agreed to hold off on additional tariffs in a bid to reignite trade talks.  Donald Trump has proven his ability “to work his magic” and the highly anticipated meeting between Xi and him at the G20 summit turned out to be a positive one; the US has also resolved not to add further tariffs and ease some bans on Huawei. Even Hu Xijin tweeted ” This is a breakthrough. ” and the surprise Trump-Kim meeting at the DMZ in North Korea made the positive PR of this past weekend perfect. Risk markets reacted right away and opened with gaps to the upside ignoring a multitude of negative economic data out of China and Japan.**

 

3. NFP to Push USD Higher? 

The manufacturing industries seem to be in an especially bad shape economically, therefore the ISM out of the US this afternoon should be closely observed. We are generally in for packed week with lot of data like OPEC and RBA interest rate decision (rate cut?) and NFP on Friday coming up. Fed signals on rate cuts might further push the USD lower. ***

 

Don’t miss our free NFP webinar this Friday. Watch BDSwiss pros trade the markets live during this key market events and ask questions in real time. Register here.

 

4. Oil Prices Surge +2.9%

Elsewhere, Oil prices rose more than $1.7 a barrel on Monday after Saudi Arabia, Russia and Iraq backed an extension of supply cuts for another six to nine months ahead of an OPEC meeting in Vienna. Crude WTI and Brent added 2.9% as of 7:50 GMT this morning despite a stronger dollar.****

 

5. Gold and BTC Remain Subdued

Meanwhile gold remained subdued as risk appetite resurfaced.  Spot gold is likely to see further downside in this risk-on environment, with its next immediate support at around $1.365-1.377. Elsewhere, bitcoin tried to reach 12k repeatedly this weekend but also had to face setback down to the $10.400 which seems to be the key support that needs to stay unbroken if we are to expect further upside potential; otherwise, a correction back down to 8k may also be possible. *****

 

You can find and trade CFDs on all of the above mentioned assets on BDSwiss Forex/CFD platforms.

 

Sources:
*CNN Jul 1, 2019 2:48 AM ET
**Reuters Jul 1, 2019 3:53 AM ET
***FXStreet Jul 1, 2019 03:07 AM ET
****Bloomberg Jul 1, 2019 06:13 AM ET
*****Bloomberg Jul 1, 2019 07:42 AM ET

START TRADING NOW

Your capital is at risk. T&Cs apply

Share.
Risk Warning: Trading in Forex/ CFDs and Other Derivatives is highly speculative and carries a high level of risk. General Risk Disclosure