North Korea initiated the nuclear shutdown. However, the denuclearization procedure itself raises questions. Pyongyang invited journalists to witness the dismantling of its nuclear test site. Technical experts were not invited. Moreover, a lot of journalists who received invitation decided that they will not attend.
Nuclear test site dismantling: Gesture of goodwill?
This move is one of the steps that N. Korea decided to follow ahead of its summit with the US, although Washington asked for “a permanent and irreversible closure that can be inspected and fully accounted for”. The summit was scheduled for the 12th of June. Nevertheless, N. Korea threatened to suspend the planned summit with the US President. The reason, according to senior officials, was that they “don’t want U.S. Summit focused only on denuclearization”.
In this context, Trump will meet South Korea’s President to explore whether there is serious probability that N. Korea will proceed with the denuclearization of the Korean peninsula. The US President has stated several times that he will not discuss further if Kim Jong Un has no intention to respect his country’s commitments.
With this in mind, a US warship arrived in Japan today to reinforce defences against any ballistic missile attacks by North Korea. It is another example of show of force to put pressure on N. Korea to proceed with the abandonment of its nuclear weapons.
The US Dollar traded flat around five-month highs against its major-traded rivals, following the news on the “postponement” of US-China trade war.
The Australian Dollar climbed toward a one-month high, boosted by US-China agreement to put their trade war on hold and higher oil prices.
The Euro headed lower against all its peers as uncertainty over Italy is still there. The common currency was the worst performing currency last week.
The Sterling fell ahead of Important data to be published this week, including inflation data and GDP. BoE may decide on raising rates based on such data.
The Japanese Yen hovered near four-month lows
Gold prices moved lower as demand for the US Dollar increased. It remained close to its lowest since December.
Oil prices inched up to a fresh peak since 2014 following Venezuela’s presidential election result and additional sanctions. Fears that the country’s oil production will be reduced exist. Brent nears to $80 per barrel.
Sources: Reuters, Euronews, CNN Money
PLEASE NOTE The information above is not investment advice.