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The US Dollar fell by more than 0.1% against the Euro Tuesday, resuming a downward trend after a brief reprieve on Monday. This dynamic can be explained by a market sentiment that sees a correlation between escalating trade tensions and the likelihood of the US Fed cutting interest rates.
A scenario perfectly illustrated by the Greenback’s performance, following President Trump’s threat to raise new tariffs on Chinese imports should Chinese President Xi Jinping fail to meet him at the upcoming G20 summit in Japan; investors immediately started selling the US Dollar, as they saw the latest escalation in rhetoric as strengthening the case for the Fed to cut interest rates, perhaps as early as July.
Photo by Chuttersnap.
