- President Trump threatens to impose tariffs on all Chinese imports
- USD loses value against a basket of currencies on Friday
- Home sales and GDP report to dominate forex trading news this week
Between now and Friday afternoon, forex investors will get a better picture of US economic performance in Q2 2018. The GDP report on Friday should show a recovering economy bolstered by higher consumer spending.
New and existing home sales reports due later this week will show the state of the housing market.
Monetary policy will dominate in Europe this week, with the ECB expected to leave interest rates unchanged on Thursday.
Meanwhile, investors will continue to watch the worsening international trade conflict unfold.
In an interview with CNBC, US President Donald Trump threatened to impose tariffs on all Chinese imports on Friday. This came after he attacked the Fed for undermining his endeavors to strengthen the US economy with its plans for higher rates.
He continued his attack on Twitter, saying stricter monetary policy helped to boost the USD. Trump also accused the EU and China of hurting the US economy by manipulating interest rates and currencies.
The USD dropped against a basket of currencies on Friday, ending an earlier rally that brought it to one-year highs. The USD index fell to 94.25 (-0.77%) after reaching 95.44 on Thursday.
This was the biggest one-day drop in three weeks, and it was enough to drive it 0.29% down on a weekly basis and 0.11% down for the month so far. This benefited other world currencies, with the EUR/USD improving to 1.1712 (+0.67%) late Friday.
The USD also dropped sharply against the JPY, with the USD/JPY falling from a six-month high of 113.16 to 111.46 (-0.88%).
The GBP/USD also gained, strengthening by 0.89% to 1.3129.