24.06.201917:46 Forex Analysis & Reviews: The dollar began to recover on the eve of the G20 summit

The dollar opened a new week with a pullback after its biggest weekly fall in the last four months, traders became cautious again about the prospects of trade negotiations between the US and China at the G20 summit. The reason for the large-scale sale in the main markets was the "dovish" forecasts of the world central banks led by the US Federal Reserve due to growing signs of weakness of the world economy. The dollar lost 1.4% against other currencies last week, its biggest weekly drop since mid-February. The sell-off raised concerns that markets have become overly bearish against the dollar, although the Fed has more room to lower interest rates than the ECB, where rates are already at a negative level.

"The Fed's rates are still higher than those of other countries, and the yield on US bonds is unlikely to become negative soon, while the yields of many other countries are already at a negative level. The dollar is the best in this negative company," said Marshal Hitler, a strategist at ACLS Global. Investors are now focused on whether Washington and Beijing will be able to resolve their trade differences at the summit in Japan this week. As noted by Vice Minister of Commerce of China, Wang Shouwen, the Chinese and American sides "must compromise in trade negotiations." Positive news from the tariff front should give impetus to the US currency.