Last week, trading was mixed on the majors against the US dollar. Losing out were the Kiwi dollar (-0.48%), the Aussie dollar (-0.38%), and the Canadian dollar (-0.15%). The biggest gain was made by the pound (+1.16%), followed by the yen (+0.94%), the euro (+0.49%), and the Swiss franc (+0.35%).
On Friday the 23rd of August, trading on the EURUSD pair closed 0.53% up. The price fluctuations on Friday were normal seeing as trading on the pair stayed below the U2 line.
There was a surge in volatility during the US session when Jerome Powell was speaking at the Jackson Hole symposium. It’s unclear, however, whether the dollar slid in response to his comments, or whether it was because of China. It was more likely a reaction to China’s decision to increase tariffs on up to 75bn USD of US imports (from 5% to 10%). The tariffs will come into effect on the 1st of September and will last until the 15th of December.
Meanwhile, at Jackson Hole, Powell said that the Fed’s measures are aimed at stimulating economic growth, which is currently at serious risk. He also noted that economic indicators are close to the regulator’s target levels. Trump once again accused the Federal Reserve of inaction, and labelled the regulator an enemy of the US economy.
Day’s news (GMT+3):
On Monday the 26th of August, trading on the safe haven assets opened up. The yuan has hit a new low against the US dollar. On Saturday the 24th of August, Trump announced a 5% increase in tariffs on Chinese goods set to come into effect on the 1st of October.
At the time of writing, the euro is trading at 1.1133. The trade conflict between the US and China is at fever pitch, so the currencies of developing countries are under pressure. The euro has jumped slightly since trading opened as markets digest the weekend’s news and the correction takes place on the safe havens. If the pair holds up above 1.1120, and with a closing price of around 1.1160, we can expect the pair to continue upwards to around 1.1210.