The US dollar was one of the weakest currencies during the past trading week due to escalation of the trade war between the United States and China. While the greenback usually thrives in the environment of risk aversion, that was not the case this time. The weakest currency was the Great Britain pound, though.
The trade war escalated after Chinese trade giant Huawei was banned from using Google services. The resulting risk aversion led to collapse of Treasury yields, which in turn dragged the US currency down. Yet some market analysts argued that the drop was not that big, meaning that markets have not priced the worst yet. And that means the dollar has room for falling further.
Meanwhile, the Brexit drama continued to unfold as British Prime Minister Theresa May signaled that she will resign as a party leader in a two weeks time. Investors were worried that this significantly increase chances for a no-deal Brexit, resulting in sell-off of the sterling.
EUR/USD rose from 1.1160 to 1.1204, falling to the low of 1.1107 during the week. USD/JPY declined from 110.10 to 109.29, retreating from the weekly high of 110.67. GBP/USD inched down from 1.2729 to 1.2710, while its weekly high was at 1.2813 and weekly low was at 1.2605.
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