For awhile now i’ve been mentioning my thoughts on U.S and the China issue. But let start with last weeks dollar beating.
The dollar last week was clobbered and fell to its lowest level since September 2008. Through out the week if you watched the correlates between the dollar and the U.S. equity markets, you would have noticed that as investors positive opinions grew regarding the global recovery, they took stocks higher and the dollar lower. The dollar was weak across the board verses the majors. As risk starts to creep back into the market, the need for safe haven assets such as the dollar may decrease.
The dollar was lifted this morning during the U.K. session verses the majors because of the possibility of a trade war with china. It is my opinion that this is inevitable. With china now in the position to flex it’s political clout, what was to be expected. In what I think my have been a preemptive move to let china know that the U.S. still has some moves of it’s own and that we are still strong. China is a little more than upset with the U.S. for imposing heavy duties on imported Chinese tires. Now to see how this plays out lets watch the play by play in the next few weeks and look for those dropping shoes. In the mean time, thanks for the trading opportunities guys.
