US-North Korea Summit Boosts Greenback

Forex News

The greenback has broadly reinforced versus the Japanese Yen and hit the maximum of 110.495, on the US-North Korea summit. The dollar index against a basket of six majors rose 0.25% to 93.789.

Kim Jong Un signed a "comprehensive" letter and the beginning of meeting was hailed as promising. Donald Trump even claimed it was "better than anybody could have expected", adding that the denuclearization process might start "very, very quickly". The discussion, however, might take longer than the President assumes. Overall, markets are very hopeful about the summit.

Chief currency strategist at RBC Capital Markets Adam Cole said: "Markets have a risk on tone as the Trump-Kim meeting has so far produced much positive symbolism, but little in the way of substance".

Additionally, Fed is expected to execute a rate hike at its today’s meeting. The key moment here is whether members will unveil their forward rate path. Shin Kadota (senior strategist at Barclays in Tokyo) noted: "While an encouraging U.S.-North Korea summit outcome would be supportive for the dollar, participants may opt to wait out the next big event, the FOMC (Federal Open Market Committee) meeting before committing themselves".