The US dollar was one of the strongest currencies during the trading week, mostly due to the optimism about Sino-US trade negotiations. Surprisingly, the Great Britain pound was also strong despite the unfolding Brexit drama.
Trade talks between US and Chinese officials in Beijing was the main theme for the dollar during the week. Signs that China is going to continue buying US goods were welcomed by markets. And while US officials denied rumors that the United States are considering reducing tariffs on Chinese imports, such speculations led market participants to believe that politicians really want to end the trade war.
Meanwhile, UK Prime Minister Theresa May suffered a historic defeat in the Parliament with her Brexit plans. And while her government survived the no-confidence vote, the situation does not look pretty. Surprisingly, markets interpreted that in their own way, thinking that chances for no-deal Brexit are lower now. That allowed the sterling rallied strongly. Some analysts speculated that the worst-case scenario is already priced in, therefore the currency has not much room for going further down.
EUR/USD dropped from 1.1459 to 1.1361 over the week. USD/JPY rallied from 108.54 to 109.77. GBP/USD ended the week at 1.2865, close to the open of 1.2850.
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US Dollar Ends Week Strong on Hopes for Improvement in Sino-US Trade Relationships
