All renowned traders and investors in the Forex market agree on the same point. Well, for them it is important to understand that world events are part of that fundamental analysis in Forex. Therefore, in CryptoTendencia we review the world situation and currencies at the beginning of the week.
The United States, Asia, the United Kingdom and Europe are the epicenter of attention for Forex analysts. Well, in these regions is where the great trends to follow for the Forex market are defined. And it is also where traders should focus to perform trades.
Since a good trader is one who knows how to intelligently analyze his operations. Achieving it through a good structured fundamental analysis of Forex.
America: United States and American currency
We begin the review of the world situation and currencies with the dollar.
The dollar is one of the most relevant currencies in the Forex market, since the world works through the greenback. And most of the traders and investors concentrate their operations in the American currency.
The coronavirus has affected all countries, causing economic recession and economies that in a certain way hang by a thread. And now, it begins to be the case of the dollar.
Because, although it started as the safeguard currency for investors and traders at the beginning of the pandemic, its performance has been in free fall. In the graph below you can see the evolution of the dollar index, against the main currencies of the world.
Thus, these are the notable news from Reuters on the dollar and the United States this week.
- Trump promises tax credits for companies that recover job yields: One of Trump’s goals is to cut the US’s dependence on China. And so, with this proposal it intends to promote that national companies monopolize the market, and thus not consume more Chinese products. This could increase the federal debt, hurting the dollar.
- Concerns about the US economic recovery increase due to a regional survey of manufacturing companies, directly affecting the dollar. Well this Monday the dollar index traded negative 0.16% down to $ 92,869.
- The dollar continues to fall, touching new lows in the early morning sessions this Tuesday. As yields have been in decline, prolonging the negative US data.
This concludes the review of the world situation and currencies in America.
Situation in Europe
Europe is the region where a gradually positive recovery has been achieved with respect to the ravages of the coronavirus. Since the positive figures, almost entirely, emanate from this region.
However, there are still many bumps in the path of the European bloc and it is important in this review of the world situation to understand what is happening in Europe.
Well, this Monday, European stocks closed higher because there was an inclination towards China. Thus increasing before a new stimulus for the second largest economy in the world.
In addition to this, travel actions, a fundamental element of many economies in the region that depend on tourism, managed to drag the European figures down.
Since European airlines, and travel agencies were affected after Britain added more countries from the continent to its quarantine list.
“What we have is a significant amount of uncertainty about the evolution of the coronavirus pandemic. And that maintains a risk premium for the transportation, entertainment and hospitality sectors, ”said Alastair George, chief strategist at Edison Investment Research.
The situation in Asia
The Asian region continues to take cautious steps with regard to economic recovery. Since the uncertainty on the part of traders and investors still remains tense regarding the operations of the currencies of the region.
However, the Japanese yen has maintained its ranges and good performance in its operations.
In the case of China, Shanghai shares closed higher on Tuesday. Extending the rally from a previous session, helped by strong gains in health and consumer stocks.
Another relevant event occurred, is that Asian stocks obtained cautious gains on Tuesday.
The momentum of the Wall Street tech rally was slowed by new investor concerns about tensions between China and the United States.
Since Trump continues to apply sanctions and controls with China, increasing tensions between the two countries. Mostly focused on tightening the restrictions on Huawei Technologies Co of China even more.
The information in this content has been extracted from reliable sources detailed below:
1- Own writing of the content author.
2- Count of the most relevant news of the day retrieved from Reuters.