Dollar’s Decline Is Slowing Down This Week

WikiFX News（6 June）-The China-US trade tensions that continue to escalate further affected the USD Index, which has been oversold and maintains a bullish outlook.

US President Donald Trump threatens to post new economic sanctions on China, which further aggravated the already tense relations between the two global powers. The trade relations between China and US will be a key factor influencing USD and risk asset markets in the upcoming weeks and months.

Several economic indicators recently released in succession by US implied the US economy is on a slow recovery. Though the Fed‘s massive stimulus helped to create a V-shape rebound of the US stock market, it’s expected that the overall economy will rally with a much slower speed. Previously, the US initial claims grew by 2.12 million while the adjusted GDP in Q2 shrank 5%, the worst in nearly a decade. Statistics also show that due to the lockdown measures during the pandemic, US savings reached a record 33%.

USDX continued to fall last week, currently at the lowest level since mid-March. If closing below the 200 Moving Average, there may be greater sell-off pressure. But as CCI suggest the USDX is seriously oversold, which can reduce its plummeting trend in the short term.

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