State of the market: dollar declines after G20 summit

Monday trades opened with a general weakening of the US currency on the data that the United States and China managed to reach a certain compromise in the trade opposition. Thus, within the framework of the G20 summit, which was held in Argentina, the leaders of the USA and China managed to reach a certain compromise in the trade confrontation, which, first of all, would freeze the existing duties at 10% until April or until the end of the first quarter of 2019. In return, China has promised to increase exports from the United States, mainly agricultural products and energy.

But it is also worth noting that it is a temporary solution. And if after the expiration of the specified period, the countries fail to agree on new trade relations, the United States will introduce a fee of 25%.

The market considers this news as very negative for the US currency and it caused the collapse of the US dollar index to the lows of the previous week. Thus, the index of the US dollar has been trading lower since the beginning of the day, limited to support levels 96.80 and 96.50-60 and a general upward channel. At the same time, it is worth noting the significant oversoldness of the American dollar and the growth of the US state bonds yield, which ultimately may indicate the formation of a correction.

Read also: “Does Monday is so hard as everybody say?”

Hanzenko Anton

Earn with the help of the trade service on the news Erste News!

Topical articles of the trader’s blog:

1. Doji candlesticks on the FOREX market
2. Expectations from the NZD/USD pair at year’s end!
3. An engulfing strategy. A Trend reversal.

Current Investment ideas:

1. “3 reasons to buy  Cisco Systems Inc. shares”
2. “It’s time to hit the jackpot on the sale of McDonalds shares!”