Which could lead to a possible legislative confrontation between President Trump; and GOP senators making a stance through its Senate Finance Committee Chairman Orrin Hatch to reconsider a change in the President's overall protectionist trade policies. On top of his disagreement towards the FED's rate hike policy that may put him at odds with the Fed Chairman Jerome Powell. However, what is backing US President Trumps confidence is actually his confidence in 'US Equities, Technology & USD Repatriation' in full force, so to speak.
On the other side of the globe, Russia unloading US Treasuries in the amount of $81B over a two month period simply to protect its own assets from US sanctions. Likewise a possible hedge strategy for Russia Central Bank against a foreseeable decline of the USD value from the tit-for-tat trade war with China and other countries involve. As of the current session, for as long as the DXY would hold its ground and recover from these trade jitters expect that such a corrective move is healthy.
Impeccable timing, as we call it, and see that this has been quite a welcome treat for those who actually see the price reaction across the board, where we consider the market will benefit more from rate adjustments. Especially so for both the Chinese Yuan at 6.78 USDCNH and the Ruble currently trading at 63.51 respectively. And without saying, what this have proven to be felt across the forex market at this time is nothing really new. As the European currencies have likewise taken a breather for now.
The question is ...for how long would these issues be up in the air?
The market shall in turn provide us the answer!
Correlated Analysis: Chinese Yuan Vs. Japanese Yen
Trade War Analogy
The market shall in turn provide us the answer!
Correlated Analysis: Chinese Yuan Vs. Japanese Yen
Trade War Analogy
Some financial analyst and news commentators have some how stated in passing that President Trumps words about the FED rate hikes and other trading partner countries with the US was an indirect 'verbal intervention' that ended a USD sell off on the last trading day for the week.
ReplyDeleteIn our perspective, a lot of these 'Market Misdirection' have given ample relief for the currency & commodity markets to recoup what was previously lost while US equities remain steady amid all these news report, including Trump and Putin's Helsinki meeting.
Let's face it, with the US unfair disadvantage in global trade deals, China's Yuan would remain at odds with the US when it comes to the foreign exchange rates as it still limits its market in spite of being so called more open policy. But for as long as Japan weighs in and is aligned with the US trade policy it would serve as a secondary buffer competitor that would counter China's attraction for a weaker Yuan.
The basic analogy in the market is that, whenever there is a persistent price consolidation period and a TUG of WAR existing between bulls and bears investors needs to follow the old classic rule in trading where the prevailing trend normally gets back on its original track.