FXTM Weekly Roundup: Trump uncertainty and Dollar volatility

This has been another trading week dominated by global trade developments, Trump uncertainty and Dollar volatility.

Investors initially entered the week adopting a cautious stance after comments from Trump last Friday sparked concerns over a trade war transforming into a currency war. On Tuesday, the Yuan sharply depreciated amid expectations over the People’s Bank of China adopting a looser monetary policy while global equity markets rallied.

There was a lot of action in the cryptocurrency arena with Bitcoin conquering the $8000 level as an inflow of positive news revived investor appetite. Risk sentiment was boosted after US President Donald Trump obtained concessions from the European Union to avert a transatlantic trade war.

The European Central Bank offered no surprises during July’s policy meeting, but a key takeaway was that the interest rates in Europe will be left unchanged until “at least through the summer of 2019”.

In the commodities arena, oil prices were supported by geopolitical risk factors while Gold remained pressured by a stabilising Dollar.

Speaking of the Greenback, the currency was boosted by reports showing that US durable goods orders and jobless claims printed above market estimates. With expectations likely to heighten over higher US interest rates this year, Dollar strength could remain a dominant market theme.

The upcoming trading week is jam packed with key economic data releases from major economies. Much attention will be directed towards the Bank of Japan meeting, FOMC statement, BoE policy meeting and allimportant US jobs report. Although there may be a heavy focus on fundamentals, global trade tensions still remain a recurrent market theme.