China and the United States intend to ease the trade war, and the US dollar has finally stabilized

After Thursday’s decline, the US dollar (USD) regained its strength against its avatradescn.competitors early on Friday as markets evaluated the latest headlines on U.S.-China trade relations. Statistics Canada will release retail sales data for February later that day, and the University of Michigan will release revised data for April's consumer confidence index.

After falling 0.5% on Thursday, the U.S. dollar index approached 100.00 in early trading on Friday. U.S. President Donald Trump confirmed late Thursday that he had a meeting with Chinese officials earlier in the day. In addition, Bloomberg quoted people familiar with the matter and said that China is considering suspending 125% tariffs on some U.S. imported goods (including medical equipment and ethane) while discussing exemption of aircraft rental tariffs. U.S. stock index futures rose 0.1% to 0.5% in early trading on Friday, after major Wall Street indexes recorded strong gains on Thursday.

Eli Lee, chief investment strategist at OCBC Bank in Singapore, said: "The threatening peak of tariff levies may have passed. In terms of the US-China standoff, both sides said they will not further increase tariffs on the existing basis."

This round of tit-for-tat tariff dispute began with US President Trump's announcement of a significant increase in import tariffs on April 2, which triggered concerns about stagnation in trade between the two major economies around the world and cast shadows the global growth prospects.

Francesco Pesole, a foreign exchange strategist at Dutch International, said in a report to clients: "Market participants may feel that they have regained some of the ‘control’ of the U.S. government, to some extent, can be found on key issues.to promote it to take a more friendly stance. Investors will seek more confirmation about the U.S. attitude to support further US dollar gains. ”

The pressure on the U.S. Treasury market has eased. After Trump’s tariff storm weakened market confidence in U.S. leadership and assets, resulting in a massive sell-off in U.S. Treasury bonds, while the 10-year U.S. Treasury yield remained at 4.30% on Friday. Japan’s Treasury bonds collected as Tokyo inflation data was higher than expected. href="https://avatradescn.com/">avatradescn.comRate of yield has also risen on the entire yield curve.

Although the market seems calm on the surface, there are also many warning signals that this state may not last too long.

Basic foreign exchange market trends:

After the Politburo meeting held earlier on Friday, China said it would promptly lower the reserve requirement ratio (RRR) and interest rates. Meanwhile, Pan Gongsheng, President of the People's Bank of China (PBOC), said They will implement moderately loose monetary policies to promote the development of China's economy. After a rise of about 0.8% on Thursday, the Australian dollar/dollar maintained a consolidation phase around 0.6400 in early trading on Friday.

The European Central Bank (ECB) is preparing to revise its monetary policy framework to be more flexible in response to price shocks amid rising global volatility. The euro/dollar strives to maintain its foothold, trading around 1.1350 at the opening, in a negative territory.

The UK National Statistics Office announced on Friday that retail sales in March increased by 0.4% month-on-month. This figure is better than in February. GBP/USD responded plainly to this data, with the latest report around 1.3300 and falling more than 0.2% intraday.

The US dollar/yen rose more than 0.6% intraday, trading around 143.50 in early trading on Friday, hitting a 10-day highest level. Bank of Japan Governor Kazuo Ueda reiterated on Thursday that if underlying inflation converged to its 2% inflation target, the central bank would continue to raise interest rates.

Bulk market fundamentals:

Gold prices were at a disadvantage on Friday, almost erasing With all the gains on Thursday, it seems to be closing in a loss this week. The trade conflict between the United States and China is getting increasingly chaotic, with U.S. President Donald Trump giving the impression that negotiations are underway and China denies that. So far, it is hovering around 3300.

Major Currency Trend Analysis:

Euro: The outlook for the euro/dollar has not changed, and intraday bias remains moderately downward. A short-term top pullback from 1.1572 may continue to move lower. But the downside should be bound by the 38.2% retracement level of 1.1039 from 1.0176 to 1.1572. On the plus side, breaking through 1.1572 will resume a larger upward trend.

Pound: The intraday bias of pound/dollar remains slightly downward. The short-term top pullback from 1.3422 will continue to decline. But the downside space should be bound by the 38.2% retracement level of 1.2917 from 1.2099 to 1.3422. On the positive side, a firm breakthrough of 1.3433 will resume a larger upward trend.

Yen: The intraday bias of the US dollar/yen remains moderately upward. The rebound from the short-term bottom of 139.87 may continue to move higher. But as long as the 38.2% retracement level of 147.12 from 158.86 to 139.87 remains unchanged, the overall risk will remain downward. On the downside, a decisive breakthrough of 139.26 will have a greater bearish impact.

The above content is all about "[Aihua Foreign Exchange Official Website]: China and the United States intend to ease the trade war, and the US dollar has finally stabilized". It was carefully avatradescn.compiled and edited by Aihua Avatrade Foreign Exchange Editor. I hope it will be helpful to your transactions! Thanks for the support!

Every successful person has a beginning. Only by having the courage to start can you find the way to success. Read the next article now!