USD has dropped in value after the latest Non-farm Payrolls from the US government confirmed that payrolls increased to 182,000—which is 7000 more than expected. Great news, so why the fall? When the ‘per-hour’ earnings were analyzed, the results caused experts to question just how positive the release really was. Add to that the Federal Reserve extending the date for raising rates amid lower economic projections, and the economic release starts to smell a little fishy. Will the bearish trend hold out? Is ‘Sell’ the order of the day for the greenback? Keep reading and find out what’s driving USD prices down and what to expect in the coming months.
US-China trade talks
The USD price slipped rather unexpectedly as the Sino-US trade talks edged forward. A USD tracking index (DXY) showed a fall of 0.1%, which is not that big, but some analysts are taking this as a sign that the talked-about price correction is finally here. When prices fall after a positive news release, caution is advised.
Believed to be approaching the final lap of talks, officials from Washington and Beijing got together to tie up loose ends, but the world media struggle to piece the deal together since information on current trade conditions is hard to confirm. China’s own TV network (CCTV) announced progress in trade negotiations. Details were scarce, but better protection for the bilateral trade balance and even intellectual property rights was mentioned. They didn’t give any dates or expectations of when it would be signed, sealed, and delivered.
The Trump administration also confirmed that the two nations were advancing on finalizing a trade deal, but admitted there was still significant work remaining before the televised handshake would be scheduled.
GBP surprised everyone last week with a continued rise to $1.3066. The primary source of the optimism was likely the latest Brexit delay, moving the EU exit to June 30. Just how many extensions will Theresa May request, and how much longer will the EU wait?
French Finance Minister Bruno Le Maire is still struggling to understand why the UK continues to request extensions. The German Justice Minister Katarina Barley also commented that the delays were just playing for time and must end.
Trading USD this week
Fundamental analysis isn’t always an accurate indicator of things to come, and traders would be wise to confirm and dig deeper before opening orders. An underlying influence may be just beneath the surface, which can come to light at a moment’s notice.
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