Source: Forex Analysis
On the eve, the EUR / USD pair managed to recover and overcome the 1.12 mark . The main driver of growth for the pair were the reports that US President Donald Trump plans to postpone the decision on customs duties on imports of cars from the EU to the United States for up to six months.
According to CNBC sources, the head of the White House intends to postpone this decision in connection with the protracted trade conflict with the Middle Kingdom.
The official statement of the American leader on this issue is expected closer to Saturday.
“It seems that Donald Trump decided that it would be better, for now, to wage a trade war on one front and focus on China,” said Shaun Osborne, chief currency strategist at Scotiabank.
According to Goldman Sachs experts, the trade disputes of Washington and Beijing can put pressure on the single European currency, which will suffer from any sign of a slowdown in economic growth in the Middle Kingdom. Moreover, according to experts, the European Central Bank is a step closer to easing the monetary rate – much closer than the US Federal Reserve.
According to the forecast of Goldman Sachs, the euro may fall in price against the dollar to $1.10 over the next 3 months.
The British currency has become the main outsider. On the eve, the GBP/USD pair could not use the stabilization at the level of 1.2900 to return at least above the level of 1.2920. News that the British government could not find a common language with the opposition. Although it didn’t become a big surprise, it turned out to be a sufficient reason to send the GBP/USD pair to the figure below.
Negotiations of the Labor Party and the Conservatives are likely to continue, but the behavior of investors suggests that they do not really believe in reaching a compromise.
Meanwhile, the pressure on Theresa May is growing as they are expected to have a date of resignation, but she made it clear that she would not leave her post until Parliament approves the “divorce” agreement with the European Union. Considering that no significant changes were made to the document and inter-party negotiations have yet come to nothing, it is highly likely that another vote on the deal in the House of Commons scheduled for the first week of June will fail.
It should be recognized that the overall performance of the British economy is consistently good, especially compared to the EU, but the continuing uncertainty on the Brexit does not allow the pound to recover.
It is possible that the next stop for the GBP/USD pair may be the 1.2773 mark.
The material has been provided by InstaForex Company – www.instaforex.com