October 21, 2019

Euro and Trade War: The single currency climbs to a two-week peak

LQDFX forex blog: Euro and Trade War: The single currency climbs to a two-week peak

The common currency rose to its highest against the US dollar since the 28th of August. The reopening of trade negotiations following USA’s invitation to China buoyed euro, as traders’ sentiment improved.

The news for the new round of trade negotiations renewed traders’ hopes that this spat will end soon.

Traders were not affected by ECB’s decision not to alter its policy during its meeting on Thursday. Draghi, the President of the European Central Bank, commented on the role of Euro. It was an answer to the comments of the President of the European Commission made earlier this week:

Juncker called for the EU to promote the euro as a global currency to challenge the U.S. dollar. “The euro should be better promoted as a world currency”.

What also weighed in Euro’s rise was the greenback’s drop as the US inflation data were weaker than expected. Further, traders embraced the Turkish central bank’s decision to hike interest rates.

The euro rose 0.2% at $1.1721 and heads for tis second best week this year against the Swiss Franc.

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The Dollar traded lower 0.1% against its major traded rivals and heads to a weekly drop.

The Yen edged higher 0.1% against the greenback.

The Australian dollar, often seen as a liquid proxy of China-related trades, edged higher 0.1% heading for its second strongest week against the US dollar in 2018.

The Sterling rose 0.2% to a 1 ½ month high following BoE decision to leave interest rates unchanged and growth upgrades. The pound traded slightly lower against the single currency.

Oil prices rose following traders’ concerns on supply weighs. Brent crude futures were up 17 cents a barrel. U.S. crude futures rose by 27 cents from their last close.

Gold prices edged higher as US dollar hit by weak inflation data. Value of the US Dollar is a factor that influences the gold’s price in the Forex Market. When the dollar is strong, gold tends to be weaker, thus its price falls and vice versa.

Sources: Reuters, CNN money, BBC

PLEASE NOTE The information above is not investment advice.

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