Weekly Currency Review: Trade War Conciliatory Turn and G20 Summit Rises Interest in Safe-haven Currencies
Summary
- Headlines surrounding political tensions continue to dictate currency trading levels
- Central Banks relaxed monetary policies weaken Euro against the Australian Dollar.
- G20 summit hold last week in a hot political context was expected to soothe relations between the U.S, Canada and China, having a positive impact on the FX markets.
Australian Dollar versus Euro
Australian Dollar gained 1.27% over Euro during the last week, extending rebound begun a couple of weeks ago. The Australian dollar reacted positively to the RBA intervention. Indeed, it is appreciating despite a further decline in the RBA policy rate to 1%, a new historic low. This fall in the RBA rate is the second consecutive, after the one in June. Moreover, AUD/EUR rise is helped by the Euro decline after comments hold by Mario Draghi, President of the European Central Bank, who said he was ready to relax monetary policy if inflation remained low.
New Zealand dollar versus US Dollar
Over the period of June 23 to June 30, the New-Zealand dollar gained 1.97% against the U.S dollar. The rise can be attributed to the country’s trade surplus, and mainly due to a 29% rise in exports to China. In addition, the trade war between the U.S. and China might not be having the negative global ripple-effect anticipated, and this has implications for FX markets in the Indo-Pacific.
Australian Dollar versus US Dollar
The Australian Dollar rised 1.40% versus the US dollar over the 7-day forecast period. The growth occurred after the Trump administration reached an agreement with Xi Jinping to ease a row that has fuelled an economic slowdown. President Trump has also backed down on his threat to impose new tariffs in his trade war with China. This US–China strategic consensus is positive for Australia in a China-dominated region.
Canadian Dollar versus Japanese Yen
The CAD/JPY increased by 1.45% last week. The rise may be the result of the G20 summit hold in Japan this friday with hopes of cooling Canada’s tensions with China. At the conclusion of the G20 Summit, Japanese Prime Minister Shinzo Abe said the leaders have agreed to principles governing the global economy. The Prime Minister, Justin Trudeau, said he was “convinced” on Tuesday that Donald Trump had discussed China’s detention of two Canadian nationals during his meeting with the Chinese President on the margins of the recent G20 meeting in Japan.
“Trade tensions are continuing, and that’s a risk. We have to keep those risks and tensions in mind. Still, we have united in agreeing that we have to lead the world economy,” Abe said at a news conference.
On June 30th, 2019 I Know algorithm issued bullish predictions for currencies for a week time horizon. The predictions include NZD/USD (New Zealand dollar to US dollar), AUD/USD, and CAD/JPY (Canadian dollar to Japenese Yen) with signals ranging from –1.64 (USD/ARS) to 0.37 (CHF/GBP) with predictability indicator ranging from 0.03 for USD/CHF to 0.31 for USD/BRL. Over the 7-day trading period from June 23, 2019 to June 30, 2019, NZD/USD rose 1.97%, AUD/USD rose 1.40%, and CAD/JPY rose 1.45%, all of which is in good agreement with the I Know First forecast.
This bullish currencies forecast was sent to the current I Know First subscribers on June 30th, 2019
Algorithmic traders utilize these daily forecasts by the I Know First market prediction system as a tool to enhance portfolio performance, verify their own analysis and act on market opportunities faster. This forecast was sent to current I Know First subscribers.
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