The EUR/USD currency pair remained under pressure on Thursday, moving under the 1.1300 mark in European markets. The US Dollar is becoming more bullish as demand grows stronger. Much of this increase is due to excitement over expected free trade agreements between the United States and China, and the United States and the United Kingdom.
As European trading got underway, the EUR/USD plummeted through the floor. This was consistent with a broader trend across the globe due to the negative impact of the strengthening US Dollar. Analysts noted that there is an optimistic mood regarding the US dollar. They credit this surge to optimism over future policy announcements from United States President Donald Trump.
At 14:00 GMT, Trump is scheduled to hold a news conference in Washington, where he is expected to announce a trade deal agreement with the UK. This recent announcement has fueled even more excitement in the industry. Better global risk sentiment has outweighed the negative effect on the demand for US Dollar.
In addition to influencing exchange rate pairs, the increased optimism surrounding US-China trade relations drove movements in commodity markets. Gold prices, which were down as much as $40 earlier in the session, are clawing back off their lows. Prices hovered around $3,343 per ounce as of Thursday. That’s a small drop of under 1%, reinforcing yesterday’s correction.
“Gold adds to the prior’s day correction, slipping less than 1% to $3,343 at the time of writing on Thursday as risk sentiment improved, with United States President Donald Trump expected to announce a trade deal agreement with the United Kingdom (UK) at a news conference at 14:00 GMT in Washington.” – FXStreet
As market participants await Trump’s announcement, the prevailing sentiment suggests that shifts in trade policy could significantly influence both the US Dollar and global markets. Indeed, the hope for a favorable trade deal seems to be a key force behind today’s market/trader sentiment.