The Greenback Continues to Lose Ground. US-China Tension Is Escalating

The US dollar continues to decline against a basket of currency majors. The US dollar index (#DX) has updated key lows (0.97%) again. The demand for risky assets is still high amid the gradual lifting of restrictions around the world. Additional support is provided by the hope of creating a vaccine against the COVID19 virus.

USChina tension is escalating. On Thursday, the Chinese parliament intends to adopt Hong Kong’s national security law, aimed at fighting separatism and terrorist activity in the city. This could lead to the creation of bases of Chinese security agencies in Hong Kong. The US, Australia, the UK, Canada and other countries are concerned about China’s actions concerning Hong Kong, as all of this could weaken Hong Kong’s special legal status. US President D. Trump, in turn, announced that the United States was working on a response to China’s forthcoming national security legislation in Hong Kong, which will be announced soon.

Ambiguous US economic statistics were also published yesterday. Thus, the CB consumer confidence index counted to 86.6 in May, while experts forecasted 88.0. New home sales rose by 623K in April instead of 490K.

The “black gold” prices are consolidating. Currently, futures for the WTI crude oil are testing the $33.85 mark per barrel. At 23:30 (GMT+3:00), API weekly crude oil inventories will be published.

Market indicators

Yesterday, there was a variety of trends in the US stock market: #SPY (+1.23%), #DIA (+2.19%), #QQQ (0.27%).

The 10year US government bonds yield has increased. At the moment, the indicator is at the level of 0.720.73%.

• The Fed’s “Beige Book” at 21:00 (GMT+3:00).

by JustMarkets, 2020.05.27