FXTM Weekly Roundup: Trump dents risk sentiment on Fed criticism

The Dollar weakened further after August’s cautious Federal Reserve meeting minutes clouded the interest rates outlook beyond September. Although policy makers remained optimistic over the health of the US economy, concerns were expressed over escalating trade tensions impacting growth.

Buying sentiment towards the British Pound slightly improved on reports of Britain holding continuous negotiations with the European Union to secure a Brexit deal.

However, with the clock ticking and fears lingering over a hard Brexit, Sterling remains vulnerable to downside risks. Any complications in the negotiation process could spell nothing but pain for the Pound.

In the commodities arena, Gold found support in the form of Dollar weakness, while Oil prices jumped after API reported a large inventory draw for the week ending August 18.

While Gold could continue to appreciate from Dollar weakness, the question remains for how long? With market expectations elevated over higher US interest rates and the Dollar stealing Gold’s shine, the outlook for the yellow metal remains bearish.

The upcoming trading week is likely to remain dictated by US-China trade developments as markets closely monitor if both nations can find a middle ground on trade.

In the United Kingdom, the Inflation Report Hearings and Brexit developments will be in sharp focus. King Dollar could receive a welcome boost if the second estimation of US GDP in Q2 exceed market forecasts.