This week News Sites are flooded with Trade War between US and China. U.S.-China trade-war concerns intensified after U.S. President Donald Trump threatened China with fresh tariffs. Following are the insight for the major Currencies:
The US Dollar
The U.S. dollar rose to its highest level in nearly a year against its rivals, as U.S.-China trade-war concerns intensified after U.S. President Donald Trump threatened China with fresh tariffs.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.31% to 94.70 after trading as high as 94.94.
EUR/USD fell 0.46%, while GBP/USD fell 0.60% as the latter pair continued to come under pressure ahead of the vote on the Brexit Withdrawal bill slated for Wednesday, and the Bank of England meeting due Thursday.
USD/CAD rose 0.57% to C$1.3277 as oil prices fell heavily, weighing on the loonie, amid concerns major oil producers were set to lift output at OPEC's meeting later this week.
The Great Britain Pound
According to preliminary figures for GBP futures markets from CME Group, investors added more than 2.6K contracts to their open interest positions on Monday from Friday’s final 240,369 contracts.
GBP/USD: Recent price action in Cable has been amidst rising open interest although volume decreased significantly.
The likeliness of deeper pullbacks remains well on the cards with the next relevant level being the 1.3040 area, November lows.
European Central Bank (ECB) President Draghi spoke in Portugal today, emphasizing the need for patience in the timing of the first rate hike.
The ECB met last week and announced an end to its bond purchasing program by the end of the year.
The central bank surprised markets by moving to calendar-based guidance for rate hikes and communicated intentions to keep rates unchanged well into the summer of 2019. EUR/USD posted a single-day loss just shy of 2% as a result of the meeting.
Last week's one-day drop in the exchange rate patently changed the near-term technical outlook for EUR/USD, confirming a continuation of the bearish downtrend after a brief correction higher from a low posted in late May. On a weekly chart, the pair printed a bearish engulfing candle last week – this invalidates the prior morning star candlestick pattern, which is considered to be a bullish reversal pattern.