During the US session, the greenback gained ground rising moderately against its rivals. The yen gave in to the US dollar but climbed up against the euro and other currencies. Traders remained wary at the Asian session. They are thinking over a new turn in the US-China trade relations. Market participants find it difficult to believe that the parties will return to the negotiation table just after the exchange of trade blows. Besides, Chinese Foreign Ministry spokesman insisted that he had not heard of any recent call with the US on trade. Thus, Trump's comments are quite conflicting for the market.
The dollar/yen pair is hesitating to follow a clear direction. The US currency grew slightly against the yen, trading at 105.79. The US dollar’s rally was triggered by better-than-expected macroeconomic data. However, investors remain worried that the yield on a 30-year Treasury bond has fallen below the yield on a three-month bill. Additionally, the inversion of the yield curve indicates the imminent onset of a recession in the country.
Today, traders are awaiting the release of the second estimate of GDP growth for June. The greenback’s trajectory is likely to be determined by this data. GDP is expected to decline slightly. At the Asian session, the US dollar index was trading in the black, locating at 98.09. Nevertheless, it is weakening against the yuan. Notably, the yuan exhibits strength for the first time in ten sessions.
The Australian dollar is sliding down again. The AUD/USD pair is trading near record lows, updated on August 7, at 0.6741. The pair is also unlikely to rebound amid weak statistics from Australia. Australia's construction work done dropped by 3.8% in the second quarter while analysts expected a decrease of 1%.
The Aussie was also pressurized by the lack of news on any progress in the US-China trade relations. The parties are likely to impose new tariffs against each other in early September, thereby pushing the world economy into recession.
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