The dollar has hit a two-week low and this is against a huge number of currencies. Trade wars escalated and this is said to have caused the plummet. Now, trade wars are starting to fade but key US data regarding inflation is said to be the one thing that could help the greenback to regain its initial direction. The dollar index against six other major currencies was down by 0.1% and Chinese President Xi Jinping has stated that he would open up the economy even more. He has also stated that he is going to lower any import tariffs regarding cars. Xi’s own comments allayed some fears regarding the war between the US and China and this restored some of the faith in terms of the emerging market. The problem is that there are a lot of varying opinions as to whether or not a dispute has been averted yet. The risk of a trade war poses a very serious threat when you look at the global momentum, but the likelihood of tit-for-tat threats have grown to such an extent that the chances of this happening are very low.
Other analysts who work in the market have said that there is very little change in the risk that remains, and this has put a lot of investors on edge. President Xi hasn’t actually said anything different in comparison to the speeches that he has made in the past, and his words do need to be turned into some kind of action in order for this tension to be relieved. The dollar fell by a shocking 0.2% and this means that it is trading at 107.035 yen. This is known as being a safe haven currency. It is said that this is going to benefit most from this trade war.
In the US, investors really are awaiting inflation data later on in the session. Analysts have done a poll and this has forecasted that the CPI would actually remain unchained in the next year, even though there has been a rise of 0.2% in February.
The euro won in this instance and it rose by 0.2%. This is its strongest level since the 28th of March. This currency received a boost on Tuesday after Ewald Nowotny, who is the Central Bank policymaker stated that ECB’s bond-buying regime would be over by the end of the year. This would make way for a first rate rise. The euro lost a lot of gains and the rouble took another fall on Wednesday. It fell by over 1% against the dollar. This took the losses of this week to well over 12% which is a shocking number to say the least. The market is still reeling from some of the many US sanctions and the lira also sank to a brand new low. This was against the dollar and a lot of people are worried about the outlook of this in general. Only time will tell if things are likely to pick up or not.