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American definitions may reach an unprecedented level. However, if the United States’ allies decide to get rid of the cabinet, the US dollar will be severely hit. Let’s discuss this topic and develop a trading plan for Euusud husband.
The article covers the following topics:
Main meals
- The risk of stagnation in the American economy rises.
- The White House may impose a standard tariff.
- Treasury sales will slow down the US gross domestic product.
- Long deals can be opened on the EURUSD pair if the quotes rise above 1.0845.
The basic expectations for the daily US dollar
The clarification on the issue of definitions is necessary to ensure enlightened decisions and mitigate possible economic effects. According to the research conducted by the International Monetary Fund, prolonged uncertainty could have a negative impact on the economy. The last announcement of the duties of the importing import on “Tahrir’s Day” in America pays the issue of whether it will contribute positively to the US gross domestic product. The recession risk increases, which leads to pressure on the US dollar and reinforcement Euusud husband.
Goldman Sachs raised the possibilities of the US economy, which is contracting in the next 12 months from 20 % to 35 %, noting the possibility of a trade war and low consumer confidence and business. JP MORGAN and MOODY analyzes have previously released similar estimates. According to their analysis, there is a possibility of 40 % of the recession due to the great uncertainty that surrounds the imminent advertisement of the White House with mutual tariffs, which had a harmful effect on planning processes. The average duties can rise to unprecedented levels, bypassing the current standard by 2.2 %. This creates a sense of urgency and anxiety between companies and consumers.
The average rate of the US tariff
Source: Bloomberg.
Donald Trump’s strategy to achieve two contradictory goals includes the implementation of import duties. It aims to increase the revenue part of the US budget in order to somehow compensate for the prolongation of the tax period and also forcing other countries to reduce the definitions. However, if the definitions are reduced or removed in the future, then its value in renewing the cabinet is a question.
Our allies may not do what the White House wants and reduce their property from the treasury in revenge. Trump aims to achieve equality of foreign trade balances, but those countries that have great surpluses with the United States tend to use this surplus to buy US Treasury bonds.
Over the past decade, foreign holdings of the US Treasury have increased from $ 6.1 trillion to $ 8.5 trillion. Its share increased to 30 %, as its largest Japanese holders were $ 1.06 trillion, China for $ 759 billion, Luxembourg on behalf of European investment funds at $ 424 billion, and Canada at $ 379 billion.
If these countries will stop the current purchase patterns or start stripping American bonds, it is likely to stimulate the returns, creating the opposite winds of the American economy. It is worth noting that Goldman Sachs does not expect that it will not exceed three actions of monetary expansion by 2025. This scenario may exert pressure on the US dollar.
The performance of the US dollar
Source: Bloomberg.
On the other hand, Wales Vargo expects a temporary decrease in the dollar index. The company expects to strengthen the US dollar by 1.5-11 %, depending on the response of other countries to the US tariffs.
EURUSD Daily Trading Plan
The “Liberation Day” in the next America is likely to increase the volatility in the market. the Euusud The husband is likely to suffer from great fluctuations, and provides both risks and opportunities for merchants. Long situations can be taken into account if the husband exceeds the resistance level 1.0845. On the contrary, if the quotes decrease less than 1.078, short functions can be opened.
This expectation depends on an analysis Basic factorsIncluding official data from financial institutions and organizers, various geopolitical and economic developments, and statistical data. Historical market data is also.
Eurusd price scheme in the actual time
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of the Litefinance Mediator. The materials published on this page are provided for media purposes only and should not be considered to be considered investment advice for guidance purposes 2014/65/European Union.
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