The US-China Relations Are Escalating

The US dollar is falling against a basket of currency majors due to the escalation of trade relations between the US and China. It should be recalled that US President, Donald Trump, promised to impose additional 10% tariffs on the remaining $300 billion worth of Chinese imports. This decision was caused due to the fact that China slowed down closing a trade deal with the US. In turn, China threatened to take retaliatory measures. The Chinese government has asked state-owned enterprises to suspend imports of US agricultural products. The US dollar index (#DX) closed Friday's trading session in the negative zone (-0.30%).

On Friday, mixed economic data on the US labor market were also published. So, the number of people employed in the nonfarm sector counted to 164K in July, which met the expectations of investors. However, the previous value was revised downward from 224K to 193K. The unemployment rate counted to 3.7% in July, which also met experts' forecasts. The growth of the average hourly earnings exceeded market expectations and counted to 0.3% (m/m). Today we expect the publication of important economic data from Germany, the UK, and the US.

The "black gold" prices show negative dynamics. Currently, futures for the WTI crude oil are testing the $54.70 mark.

Market Indicators

On Friday, aggressive sales were observed in the US stock markets: #SPY (-0.75%), #DIA (-0.36%), #QQQ (-1.47%).

The 10-year US government bonds yield has updated local lows. At the moment, the indicator is at the level of 1.75-1.76%.

The news feed for 2019.08.05:

- Some indicators on economic activity in Germany and the Eurozone at 10:55 (GMT+3:00) and 11:00 (GMT+3:00), respectively;
- UK services PMI at 11:30 (GMT+3:00);
- ISM non-manufacturing PMI in the US at 17:00 (GMT+3:00).

by JustForex, 2019.08.05

We advise you to get acquainted with the daily forecasts for the major currency pairs.

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

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