US Dollar Trades Weak – Trade Tensions, Weak Economic Data Weigh
Forex markets are trading cautiously at the beginning of a fresh trading week amid thin volatility, following a busy few days loaded with fundamentals during the previous week. After a brief rally on the back of optimistic NFP figures, the US dollar is starting the week on a bearish note.
At the time of writing, the US dollar index DXY is trading at around 97.19 after the NFP figures beat expectations but manufacturing PMI data came in soft. Last week, the Fed cut interest rates by 25bp, which despite being almost completely priced in, drove weakness in the US dollar. The greenback is yet to recover from the Fed’s less hawkish than expected tone for the future.
In addition, a lack of clarity on when the US and China are expected to finalize and sign their partial trade deal also weighs on the dollar. On Friday, although both teams confirmed that negotiations were progressing well, they were unable to offer more insight on when the two nations’ presidents could meet to sign the deal.
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