US Dollar is Reinforcing After Yesterday’s Sharp Decline
The US dollar is recovering slightly against the major currencies, after it was observed a big one-day decline yesterday, after news that China is ready to slow or suspend purchases of US Treasury bonds. Analysts suggest that China can make some adjustments to its reserves of foreign reserves, but it is unlikely that China will stop buying US Treasury bonds.
But still, uncertainty about China's position could potentially weaken investors' appetite for risk, and the US dollar is likely to face some pressure against the Japanese yen due to speculation about the future withdrawal of the Bank of Japan from its large-scale stimulus policy.
American stock markets weakened, as the US yield jumped after news from China. But more importantly, speculation that President Trump will announce that the US is withdrawing from NAFTA trade agreement has emerged, given the possible negative effects on corporate earnings.