The theme continues in that the dollar’s slump is largely reflective of the policy incoherence we’re seeing with the US administration. The chaos and confusion is marking a loss of confidence for the currency and that is continuing today. USD/JPY is down 0.7% now to near 143.00 while AUD/USD is starting to creep back towards another test of the 0.6500 level again:
Trump’s tariffs are temporarily reinstated for now but there is still much confusion about what is going to happen next. And with things also not going smooth sailing with China, that is adding to more risk and uncertainty coming into June trading. I mean, did you really think that either side was going to play nice? The decoupling between the two countries is still the macro theme that will dominate the trade landscape in the decade(s) to come.
Circling back to the dollar, things are not looking good as investors are continuing to rotate their portfolios amid the policy incoherence and uncertainty that beckons in the US. That is going to make it another challenging month for the greenback especially with the deadline nearing for Trump’s trade deals, if however still relevant.
In that lieu, gold is catching a strong bid today as well with the precious metal up 2% on the day to $3,356.
This article was written by Justin Low at www.forexlive.com.
