The euro returned to its familiar position of poor relative performance against the dollar as trading began on Monday.
This followed the news that further US-China trade talks were scheduled to begin this week. Although the euro saw some surges when the talks were first announced last week, it’s clear that the common European currency also has some work to do in order to rise back to its briefly dominant position. It fell 0.2% to the $1.1421 level on Monday.
The dollar index, meanwhile, went up by the same amount as the euro’s drop and was sitting at 96.248 early on Monday.
The US and China have been engaged in an escalating trade row for a number of weeks now, and each side has placed sanctions on the imported goods of the other.
In recent months, President Donald Trump has made public statements which suggested that his administration was not prepared to budge on the issue.
“China, the European Union and others have been manipulating their currencies and interest rates lower, while the US is raising rates while the dollar gets stronger and stronger with each passing day – taking away our big competitive edge,” he wrote.
At one stage just last month, President Trump even said that he was willing to place tariffs on every item imported from China.
However, it emerged last week that plans are in place for trade talks between the two sides to occur. These are believed to be on the cards as early as this week, although the date does not yet appear to be set in stone.
The President himself is not expected to be meeting his Chinese counterpart or indeed any of the visiting officials if and when the talks take place. Instead, a junior official from the Treasury Department will meet the Chinese team for discussions when they arrive in Washington, DC.
Elsewhere on the economic calendar this week, Australian dollar traders will no doubt want to watch for the release of minutes from the last Reserve Bank of Australia meeting which come out on Tuesday.
Over in Britain, Tuesday also sees important data releases. At 10:00 GMT, the Confederation of British Industry (CBI) will release its industrial trends survey covering orders made in August.
Wednesday is a big day for North America, and not just because the anticipated Chinese talks may have taken place by then. The US will see data releases on everything from mortgage applications to existing home sales, while those traders who are concerned about the relationship between global forex market performance and the oil industry may be interested to see the EIA crude oil stocks change data at 14:30 GMT. In Canada, month-on-month retail sales data will be released at 12.30 GMT as well.
Looking towards the end of the week, Thursday will be important for the euro given several releases on the cards in France and Germany. French business climate data for August will come out at 06:45 GMT, while the President of the Bundesbank – Germany’s central bank will make an important speech at 07:30 GMT.