In the Asia Pacific money market trading as of late afternoon today, the general US dollar or greenback is still very mild when the market has seen that the US dollar is likely to be seen resuming its correction side as financial markets await the release of US jobs data later in the day.
As we know that in previous trading, the greenback condition is under pressure from some other major currencies in the world, thus causing EURUSD to close higher at 1.1690 level, GBPUSD closed down at 1.3217, AUDUSD closed up at 0.7387 and USDJPY closed up at 110.58.
And for a while this morning, EURUSD is moving at the level of 1.1693, GBPUSD is moving at the level of 1.3221, AUDUSD at the level of 0.7394 and the yen at the level of 110.60.
In earlier trading, the US dollar index traded down again with the trigger of a still hot trade war situation in which China’s plan will also do new tariffs for $ 34 billion worth of US products later this week. The situation ahead of the execution leaves investors skeptical of the future of the global economy, so they need a safety asset ahead of the release of US employment data later in the day.
The safe-haven situation is inevitable given the temporary avoidance of US dollar-denominated assets because the Fed itself has already started to worry in the note of the Fed’s rate meeting minutes 2 last week. Although Fed minutes claimed that the rate hikes could still continue this year and next year, the US downturn tends to decline, making the economic recession side the Fed’s consideration of the anticipated war on trade.
The discourse that the Fed could raise interest rates 2 more times this year and 4 more next year will slightly disappear when anticipated recession expressed by the Fed. Investors see that about $ 2.5 billion of bonds in China have defaulted and apparently the conditions of trade war began to put China’s economy on hold, prompting the Chinese government to immediately take new fiscal policy by cutting taxes to increase consumer purchasing power. In addition the PBOC will continue to oversee the liquidity of China’s financial markets, thus making the dollar index still under pressure.
The possibility of a correction of the dollar index is still there with the expectation of tariff problems with the EU to be an opening for the war trade war. Chancellor Angela Merkel of Germany seems to have agreed to give tariffs less than 10% of US auto imports, in order to avoid 20% tariff pressure from Trump. So far there has been no further decision before meeting with the EU Commission, but the market has been reading the direction of profit-taking index of the dollar is increasingly visible.
But it seems that the culmination of trading today is looking forward to US employment data that greatly affect global investor investment decisions in the next month.