Japan defense treaty is a disadvantage for US?

Daily Analysis - 25/06/2019

Trump believes the defense treaty with Japan is not favoring his Country


The United States President Donald Trump lately has expressed privately the need to withdraw the U.S from the defense agreement with Japan because he believes that the postwar agreement is a disadvantage for the United States according to Bloomberg published late on Monday.

Nevertheless, the president of the United States or his administration did not exercise any actions regarding the matter and a move like that is extremely unlikely, according to people familiar with the subject.

The U.S. president strongly believes that the treaty which is more than 60 years old is not favoring the United States as the Japanese military has no commitment to come to U.S. defense, according to the report.

Gold rally continues

On Tuesday the safe-haven Gold rose more than 1% to its most important level in six years. What supported the famous yellow metal is the fact that the dollar is softened toward the possibilities of monetary easing by the Federal Reserve. Another factor that supported the gold and weakens the greenback is the increasing US-Iran pressure that lifted investors risk appetite. US gold futures surged more than 1.5% to $1,440.19 an ounce. Spot gold went up more than 1% to $1,435.43 per ounce.


Oil fell due to demand fears

On Tuesday Oil fell due to fears that crude demand will fall. However, Oil was supported following the U.S announcement of fresh sanctions against Iran because of the increasing pressures in the Middle East.

U.S. crude futures fell about 58 cents to $57.30 a barrel while the U.S. benchmark grew 0.8% in the previous session. Brent crude futures dropped 57 cents a barrel.


Fed drove the greenback down

On Tuesday the popular greenback fell to a multi-month low versus the euro and the Japanese yen due to the possibility of rate cuts by the Federal Reserve. In the meantime, the safe-haven gold and Swiss franc advanced upon Middle East tensions. The U.S dollar moved lower more than 0.3% to 106.92 yen. The euro scored a 120-day top of $1.14104. The dollar index versus a box of six major competitors descended to its lowest level in three months to 95.942. It dropped more than 1.5% over the latest five trading sessions.


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