Although the market has little hope in the meeting between US President Donald Trump and his Chinese counterpart, Xi Jinping, it has put itself in a waiting position pending the meeting between the two presidents, which will take place on tomorrow at 6:30 am UT.
Since it is unlikely that Trump will lift the sanctions on Huawei, it is likely that the G20 will only lead to a postponement of customs duties to again save time. The likelihood of a finalised commercial deal being announced this weekend is very low.
In terms of the impact on the US dollar on the Forex (DXY, US dollar index against a basket of major currencies), it is quite obvious that the Federal Reserve of the United States will act according to the outcome of discussions this weekend. The Fed unveils its next monetary policy decision on Wednesday, July 31, and the market is still anticipating a fall in the fed funds interest rate by 25 basis points (bps).
But these remains open between a business as usual scenario, a downward scenario of 25bps and a downward scenario of 50bps. However, the impact on the US dollar (DXY, and by inverse correlation on the price of the euro dollar, will be very different.
Still on the fundamentals of major central banks, remember that the Chinese Central Bank (BPoC) continues to intervene on the Chinese interbank market to avoid any liquidity crisis. This is a strengthening factor of the Yuan Renminbi (USD/CNY rate cut) and this has a bullish effect on the AUD/USD and NZD/USD rates.