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In its weekly report on the money markets, NBK said the US dollar was still needed, pointing out that the market was characterized over the past week by a limited evolution, given the continuing trend towards securing global safe haven badets in August.
Concerns about slowing global economic growth, exacerbated by trade tensions between China and the United States, have contributed to increased sales pressure on the stock markets and stimulated demand for treasury bills, yen Japanese, gold and other badets considered safe. The Japanese yen, which is increasingly bought in times of economic instability, was on track for a second straight week against the US dollar, while 10-year US Treasuries fell below 2% for the first time in three years.
The dollar remained indispensable even though the outlook for the Fed's monetary policy had been completely changed and monetary policy was easing in comparison with the tightening of measures taken since the beginning of the year.
Traders expect the Fed to lower interest rates by at least 50 basis points and eventually by 75 basis points before the end of the year. The hawkish tone adopted by the Fed at its last meeting seems to be insufficient to deter expectations of further rate cuts. Some investors and economists are concerned that the trade war between the United States and China is entering a new phase that could further damage the global economy. If economic data does not start to give more positive signals, or if the US and China are able to mitigate their dispute, investors expect the Fed will have to further reduce interest rates to ease the financial and economic pressures. continue to grow.
The pound sterling remained under pressure against its monetary counterparts and hit its two-year low against the euro after a report revealed that new Prime Minister Boris Johnson was ready to organize elections after the cut-off date set for the United Kingdom's separation on 31 October. This measure meets expectations that Parliament will be confident after the summer holidays. If Johnson loses the vote, the current government must resign or call a general election. "We can not stop them from holding elections, but we control the timing," said a government official. "We will impose the date after October 31". By holding elections after the deadline, Johnson is seeking at all costs his promise to separate from the EU in October. Increasing uncertainties over the United Kingdom's secession from the European Union and weak global economic growth led to a contraction in the second quarter for the first time in nearly seven years. Output fell 0.2% in the last three months in June, a performance lower than expected by economists.
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