The euro slipped on Friday as consumer confidence in the eurozone in May stayed close to the 22-month low reached in March.
This downturn in USD was not helped by US stimulus uncertainty as Republicans and Democrats failed to reach an agreement over the next package, despite the previous stimulus measures expiring at the end of July.
Also weighing on the US dollar was the big miss in Wednesday's ADP employment report, which printed well below expectations, with private payrolls rising by just 167,000 in July.
USD exchange rates finally began to mount a recovery at the very end of the week however, after President Trump signed an executive order banning two popular Chinese apps and the White House imposed sanctions on Hong Kong leader Carrie Lam.
The resulting souring of US-China relations saw investors flock to the safe-haven US dollar, in spite of Friday's US non-farm payroll release raising concerns over US employment growth.
Looking ahead, as US-China tensions continue to flare its likely we may see the US dollar remain well supported this week as investors favour safe-haven assets amid fears the recent US-China trade deal could be at risk.
Also dominating the attention of USD investors this week will be ongoing negotiations regarding the next US coronavirus stimulus package.
Markets fear the impasse between the two sides could be drawn out, leaving millions of American families struggling financially and prompting volatility in the ‘Greenback’.
Finally, on the data front an acceleration in US inflation last month is likely to be welcomed by USD investors this week, but could this be offset by a sharp slowing of US retail sales growth over the same period?
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)