Forex Overview: Forex Sentiment is On Trump, Trade War and Brexit

Forex Overview: Forex Sentiment is On Trump, Trade War and Brexit

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Forex Overview: Forex Sentiment is On Trump, Trade War and Brexit

Last week (9-13 July), the focus among investors and traders was on Donald Trump. During the week, he traveled to Belgium for the annual NATO leaders meeting. As expected, the US president is a major concern for the annual agenda. Even before he landed, he had shown signs that he was not happy with the organization. He sent several tweets, questioning the importance of the organization.

Shortly after landing, Trump immediately complained to the NATO Secretary-General about Germany. He blamed Germany for being a free passenger at NATO for his low expenditure and his close ties to Russia. Germany is the richest country in the European Union and the second richest in NATO after the US. However, the country has failed to meet its commitments to increase defense spending. Germany also builds a major pipeline that will be the natural gas supply distribution channel from Russia. In addition, Trump is not the first US president to condemn NATO, and Germany in particular.

After his trip to Belgium, the US president flew to England, where he was greeted by a huge protest. Even so, he keeps making news, especially about Brexit. In an interview with The Sun, the US president expressed his disappointment with Brexit’s ongoing pace.

He said that he had spoken with British Prime Minister Theresa May about the best way to approach Brexit with a full exit from the EU. However, Theresa May took the opposite direction. In the interview, Trump also said that it would be difficult for Britain to enter into a trade deal with the United States.

The other news from Britain that rocked the pound sterling was the resignation of Brexit minister David Davis and Foreign Minister Boris Johnson that sparked market fears that a Brexit drive would happen.

Another big news last week was from the United States announcing an import tariff on Chinese products worth $ 200 billion, a move that is expected to take place after China retaliates on US tariff action. This news is an indicator that the escalation of trade conflicts between the two largest economies in the world will continue.

China has vowed to avenge the new US tariff. Experts believe Beijing could use non-tariff methods to reply to US rates such as devaluing its currency, slowing US bond purchases and limiting the number of US firms in the country. As a result of the tariff war, global stocks fell but recovered on Thursday after emerging some US guarantees.

In last week’s closing session China’s trade data touched record increasingly fueled market concerns that the feud between the two countries will continue but soon investors and market participants are starting to think of leaving the US dollar as a safe-haven asset so that at the close of the session a number of rivals major US turns positive, as well as the price of gold that immediately bounced after dropping to its lowest level since a year ago although it still ends in the red zone.

For next week (July 16-20) there are many important agenda and data from various countries that will be the market spotlight, including China’s GDP, investment data and China’s industry, US manufacturing and retail sales data, minutes of Australia’s latest central bank meeting, the British central bank governor, British employment income data, Federal Reserve chairman test and UK inflation and retail sales data.

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