EURUSD May Weaken Further as Trade War Fears Re-Emerge

Trade wars in focus again:

Donald Trump said Tuesday that he was not pleased with the recent trade talks between the US and China.

That has revived trade war fears, potentially keeping the US Dollar on an upward path against the Euro.

Check out the IG Client Sentiment data to help you trade profitably.

And for a longer-term outlook take a look at our Q2 forecast for USD.

Trump stokes trade war fears

US President Donald Trump has brought trade war fears back into focus, saying that he was not pleased with the recent talks between the US and China, although he added that they “were a start”. That has tempered previous hopes that trade has faded into the background as a market factor and turned risk appetite sour.

In turn, that has boosted USD and the decline in EURUSD now seems set to continue, particularly as the Euro remains under pressure from the political situation in Italy. Separate comments by Trump that there was a “substantial chance” the US summit with North Korea will not take place as planned on June 12 has reinforced the risk-off sentiment in the markets too.

EURUSD Price Chart, Five-Minute Timeframe (May 23, 2018)

Chart by IG

You can read more of our trade wars coverage here:

The Impact of Tariffs and Trade Wars on the US Economy and the Dollar

A War to Trade More, Not Less – What’s Behind US-China Tariffs

Why International Trade News Matters for Foreign Exchange Rates

US China Trade War & a Brief History of Trade Wars – 1900 until Present

Trade War: No Respite for EURUSD as US-China Trade Talks Resume

USD Rebound Likely After Two Days of Falls, US-China Trade War in Focus

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— Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex

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