However, Trump once again showed why we prefer the sale of the dollar for a quite long time. He began the day by accusing Argentina and Brazil of understating their national currencies value to gain a competitive advantage for their products in the US market. In response, the President of the United States raised tariffs on the import of steel and aluminium from these countries.
Well, he continued with the Fed’s traditional accusations of overvaluation of the dollar and called on the to weaken and the dollar.
Markets took it as signals for sales of the American currency. Moreover, the buyers on the dollar were not happy with the data on the ISM Index in the US manufacturing sector: 48.1 pips with a forecast of 49.2 pips. Recall that an index value below 50 signals a deterioration in business activity in the US manufacturing sector.
Well, returning to Trump and his actions on Monday, in the light of such events, it’s premature to talk about the end of the trade wars. Rather, on the contrary, there is a reason to talk about the transition of trade wars to currency wars with the consequences that maybe even more devastating for the global economy. In general, the future looks rather bleak. In this regard, our recommendations to buy safe-haven assets remain relevant.
Our basic positions for today are: finding points for sales of the dollar, purchases of gold and the Japanese yen , sales of oil and the Russian ruble . We also note that while the period of low continues on the foreign exchange market, it is worthwhile to continue aggressive trading on the intraday basis without obvious preferences, for which you can use watch oscillators.