The main event of the coming week will be the trade war between the two strongest players in the world – the United States and China. But at the initial stage, the mutual recovery of higher duties may not lead to significant changes in the dollar rate. The US currency may continue to weaken and complete a technical rebound in order to remove oversold.
The scenario of a sharp strengthening of the dollar index is possible only in the case of a designated date for the introduction of new duties on the segment of Chinese imports reaching 325 billion a year. At the moment, 25% of the additional charges for the supply of products from China to $ 200 billion are beginning to operate.
Obviously, traders will wait for the reciprocal steps of China, which have already been promised by the government, and then they will assess with what economic indicators countries came to the beginning of the conflict in order to predict the damage. Based on these considerations, the formation of the medium-term trend in the Forex market will begin, approximately the end of the week.
The other pole of international tensions is Iran, which is trying to blackmail European partners with a way out of the “nuclear deal” so that they can put pressure on the United States and achieve a relaxation of sanctions. As a result, the country had the opposite effect – the expansion of restrictions on the export of metals and the negative reaction of partners, including China – the main buyer of oil.
Among the minor hotbeds of tension, North Korea is notable, affecting the rates of Asian currencies by rocket launches, and the lengthy conflict in Venezuela, which the United States can refuse to support, disappointed in the opposition, which will somewhat ease tensions in the oil market.