xysoom: This week focus: Sino-US Issues

xysoom

The dollar weakened over the past week following the strengthening of the euro, which rose after news of Franco-German proposals for grants for the European Union (EU) and sectors hit by the Covid-19 pandemic. Germany and France proposed that the European Commission lend 500 billion euros on behalf of the entire EU.To get more news about WikiFX, you can visit wikifx news official website.



The fall in oil prices on Friday amid rising US-Chinese tensions and doubts about the pace of recovery in demand from the Covid-19 crisis, triggered a correction in commodity currencies. The Canadian dollar weakened around 0.2% over the greenback due to a drop in oil and Canadian data showed a record decline in retail sales. However, during the week the loonie still recorded a gain of around 0.8%.

　　Gold prices touched a 7.5-year high last week thanks to rising US-China tensions, prompting investors to hunt for safe haven assets to hedge. Gold also rose thanks to stimulus by the world's central bank. However, risky sentiment emerged amid hopes of economic recovery forcing the precious metal to step down from its 7.5-year high. Even so, the decline was able to be limited due to strong risk aversion sentiment amid US-China trade tensions.

　　Oil prices have recorded gains since the end of April, but began to experience a correction on Friday. Last week, oil prices touched a 2.5-month high of around $ 37 thanks to increased risk-on sentiment. Several factors that support oil prices include; the results of a positive vaccine trial by the Modena company, efforts to cut output by oil producing countries, to the increasing demand for oil from China. Chinese demand rebounds around 13 million bpd, up 90% to near pre-pandemic levels. However, last Friday optimism about growth began to fade after the Chinese government said that they were not too optimistic about this year's growth target, highlighting the serious challenges to the economy due to the pandemic. China also refused to reject the massive stimulus. In addition, rising US-China tensions have also weighed on sentiment.

　　Asian stocks are vulnerable amid the central bank's mega stimulus offset by renewed tensions in US-China relations, which reduce risk appetite. The Nikkei index rallied 1.5% after the Nikkei newspaper reported a Japanese stimulus package worth US $ 929 billion, the largest financial assistance to companies affected by the pandemic. But the rise of US-China tensions could limit gains.
A series of events, as well as data will again color the movements of the financial markets this week. Investors will keep a close watch on developments regarding the discovery of vaccines, which may raise risky assets, but US-China trade tension will overshadow. This week there was also a speech from Fed chairman Jerome Powell. While economic data to be released include; US GDP and euro zone inflation.

　　Fanny has started her self-learning of Forex since 2005 and has joined an Indonesian broker as a financial consultant in 2009. Through “trial and error”, she has learnt a lot from failure experiences. She is now a renowned trainers for the forex beginners and has helped the clients to get the profits from trade.