The current US-China trade war is particularly affecting the global economy. ANDREW CABALLERO-REYNOLDS/AFP via Getty Images The fed-up war between the world’s two biggest economies just went nuclear, and it’s only getting worse. This war is still having wide repercussions across all financial markets, and more specifically in foreign exchange. Most recently, US President Donald Trump doubled down on his refusal to negotiate a trade deal with China. He warned that to succeed, the United States must first address its own trade deficit.
The RBNZ stands ready. Geopolitical tensions continue to worsen. Even if they cut interest rates 25 basis points as planned, they could afford to remain decidedly dovish in the coming months. The combined effect of these recent developments will probably create a positive spiral with an upward thrust on currency valuations and investor sentiment.
The forex market is always changing, as traders watch monetary policy and economic data releases at every turn. The USD/JPY currency pair reversed into the start of the new week in a bearish manner. Nonetheless, it managed to mount a mild comeback, rising above the 146.00 level at the start of play on Monday. With these considerations dangling over the market, all eyes are glued on the upcoming data releases. They have been particularly keen on the US Consumer Price Index (CPI), since it can provide insights into inflationary pressures and guide monetary policy decisions.
As these seasoned traders continue to trade the forex market, it is apparent that the risks involved with trading are still glaring. Note that, according to European reports, 81.4% of retail investor accounts lose money trading Contracts for Difference (CFDs) with such providers. This statistic alone speaks to the need for careful, thoughtful trading to become a widespread practice among traders.
Against this grim backdrop, gold buyers are making inroads. The increasing dangers of a world of trade wars and economic recession are the things motivating their interest. The precious metal often serves as a safe haven during times of economic uncertainty, prompting investors to seek stability amid market turmoil.
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Please note that the content presented by harbor FXStreet is not in any way intended to constitute professional financial advice. This article should not be considered investment advice. Traders and investors should always do their own research and consult with investment professionals before making any financial decisions.