Will trade war be over soon? We certainly hope so. For the last year and a half our trading was dependent completely on the moods surrounding trade relationship between USA and China. Whatever Trump stated – it was constantly reflected in the performance of the world markets and popular assets. We all are waiting for trade war to end. But, there is one tiny detail that we are not exactly anticipating – safe havens are going to be damaged when the trade war is over.
Yes, yes. This is the conclusions that I am going to make. And why? Well, I can see the tendency already starting to emerge. Yesterday it was announced that USA and China are going to sit down in the beginning of the next months in order to discuss the trade war. And right after the statement was issued we could see the outflow of traders from USD into Asian markets as risk hunger was instantly lifted and the need for safe havens fell.
That is the tendency that we are going to face if trade war slows down or stops altogether. Just look at USD. Its status as safe haven kept it very high, but as soon as trader agreement talks kicked in, we see the fall incoming. Of course this allowed other currencies like GBP and EUR to maintain their position no matter how much trouble they are in, but weak dollar is not going to mean good luck to all of us. It is going to lead us to fears of financial crisis and weakened US economy – something we can’t really afford right now.
With dollar losing its positions use trading signals to find out what the tendencies in the world markets are.