Right now the markets are experiencing a wave of calm which came regarding international trade tensions. Although the United States and China are still very much at each other’s throats over trade, the US was able to strike a deal with its southern neighbor, Mexico. This came after many months of renegotiating the conditions of NAFTA which displeased President Trump. Now that a deal with Mexico has been ensured, the United States will turn towards settling things with Canada, the other country part of NAFTA. Trouble is not expected, so investors are hoping trade tensions will lower.
Even though this is objectively good news for the financial markets, the American dollar is not taking it too well. The USD appreciated over the past weeks because the trade war climate was making it act like a safety asset, with many investors rushing to buy dollars well in advance. Now that at least some of the tension is gone, the USD relaxed a little and dropped to a monthly low against major currencies. The dollar index decreased to 94.52.
