Fresh off the back of one its worst trading weeks in recent memory, the US dollar opened this morning in very much the same precarious position last week left it in. Traders moved in the droves away from the currency, as speculators saw little by way of reassurance from President Trump’s wide-ranging interview with Fox news over the weekend. The President looked to move blame onto local governors for the continuing coronavirus mess; with commentators speculating key infrastructure reforms promised in 2016 may have to wait until after the November election, with Trump trailing by some 10-12 points across most voting intention data reports – which he has decried as “fake polls”.
Putting the interview aside, markets have flooded from one safe space to another – with gold prices hitting all-time highs yesterday, pulling up other precious metals such as silver. In short, there is just far too much uncertainty in the United States at the moment to consider the dollar as the haven currency it was at the peak of the coronavirus pandemic in its late-March; namely, the expiration of coronavirus benefits, a wobbling tech market, an upcoming election and most of all, worsening relations with China. The latter point is the key driver going into this week, as over the weekend, the two Governments shut down consulates in Houston and Chengdu respectively – a diplomatic breakdown now going hand in hand with the continuing trade tensions means that the US economic recovery is looking rather precarious.
Have a great week ahead.
Author: Joshua Haden-Jones, Senior Relationship Manager
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