Trump Attacks EU and Canada ahead of G7, Dollar Hits a Three-Week Low

Trump Attacks EU and Canada ahead of G7, Dollar Hits a Three-Week Low


US stocks ended mixed on Thursday with Dow Jones closing in the positive territory while S&P500 and Nasdaq closed on modest losses to end their winning streak. The Dow Jones Industrial Average secured only 95 points of gains after reaching gains of 180 points throughout the session. The SPX500 and Nasdaq Composite dropped by 0.1% and 0.7% respectively to put an end to their four-day winning streak.  The sell-off in the technology sector was the main factor behind the drop in the benchmarks. US stocks remain vulnerable to more declines as the G7 summit kicks-off today. President Donald Trump tweeted aggressively against Canada and the European Union on trade leading investors to harvest their profits to avoid any risk from the Summit’s outcome.


The dollar fell for the fourth consecutive day to post the lowest levels in three weeks. The greenback is facing pressures as investors weigh the positive expectations from the European Central Bank meeting next week. Ben Bernanke, who served two terms as the Chairman of the Federal Reserve stated yesterday that the US economy could face a “Wile E. Coyote” moment in 2020. He said that the US economic growth could face a slowdown as the tax cuts and increased federal spending provide stimulus at the very wrong moment. The Federal Reserve holds a two-day meeting starting on June 12, and the market participants are expecting a rate hike.


The Canadian dollar remains vulnerable to choppy trading against the United States dollar as trade tensions mount. Investors focus on the headlines of trade tension as a negative outcome could affect the economic indicators in the long run. President Donald Trump attacked the Canadian Prime Minister Trudeau and said that he is being “so indignant." Trump asked Canada to reduce the tariffs on US goods or else he will impose higher tariffs. The Canadian job report is due today where the Canadian unemployment rate is expected to stay at 5.8%, the lowest level in more than forty years.


Gold prices rose slightly on Thursday as the US dollar weakened further. However, gold prices came in under pressure earlier today. The precious metal has been trading in a tight range between a low of $1282 and a high of $1307 for the past three weeks. An escalation in the trade tensions at the G7 could provide support to the prices.


Oil prices rose on Thursday as investors focus on the Venezuelan supply. PDVSA is not being able to export oil to customers due to the deepening financial crisis and the lockdown from the United States. Market participants will be waiting for the OPEC meeting that is taking place on June 22nd in Vienna to grasp information about the future output plan. The US Baker Hughes oil rig count is due today.

Major Economic Events

GMT Country Event Expectation Previous
12:30 CA Unemployment Rate (May) 5.8% 5.8%
12:30 CA Employment Change (May) 17.5 -1.1
17:00 US U.S. Baker Hughes Oil Rig Count    


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