Today we continue to observe a decline in the value of the American dollar. The reserve currency is losing positions on account of the recent dovish shift in the Federal Reserve’s monetary policy. Investors are positive that we will see an interest rate decrease in the United States for the first time in years, which is causing a weakness in the USD.
On the other hand, the recently exacerbated conflict between the United States and Iran has been good to safe-haven assets. Gold and the Swiss Franc have both gone up in value. The Japanese yen has also been making strides, with the USD/JPY dropping to 107.35. Even the euro, though not regarded as a safety asset, managed to push above the 1.14 level against the dollar to a three-month peak.
The main reason why economic growth is slowing down in the United States, the country boasting the strongest economy in the entire world, is the trade war with China. This week Trump and Xi Jinping will meet during a G20 summit in Japan to talk about their dispute. The US President has been positive that the two can reach a deal during the meeting, but investors are unsure whether one gathering of the two leaders can achieve more than months upon months of detailed negotiations, which failed to result in a trade deal.
