Talking Points:
- Emerging market currencies remain under a significant amount of presure, with both the Argentinian Peso and the Turkish Lira extending their losing streaks.
- Talks between Canada and the US over the NAFTA negotiations are ongoing but making little progress; meanwhile, US President Trump may be close to announcing the implementation of $200 billion of tariffs on Chinese goods.
- Retail trader sentiment[1] is decidedly mixed on the US Dollar at the start of September.
See our longer-term forecasts for the US Dollar, Euro[2], British Pound[3] and more with the DailyFX Trading Guides[4]
The US Dollar (via the DXY[5] Index) is starting off September on positive footing, rising to its highest level since August 24 in the process. Even as the calendar has flipped into the final month of the quarter, many of the old concerns that have influenced price action remains as the key drivers: trade wars emanating from the United States; contagion among emerging market economies; and geopolitical tensions surrounding Syria.
With respect to trade wars, the start of September already has two significant developments to watch for. In terms of the NAFTA negotiations, it's been reported that Canada and the US are making little progress, and that US President Trump is likely to move forward in presenting Congress with the Mexico-only version of the trade deal.
USD/CAD[6] Price Chart: Daily Timeframe (January to August 2018) (Chart 1)
The goodwill that we saw built into the Canadian Dollar[7] in the first few weeks of August was all but eliminated at the end of the month, and USD/CAD is now positioned in a manner to suggest
