One immediate positive sign of the historic summit between US President Donald Trump and North Korean leader Kim Jang Un is that the US dollar reached a 3-week high after the two leaders signed a “comprehensive deal” for the complete denuclearization of Korea.
The dollar is at it’s highest rate since May 23, rising around 0.4 per cent to 110.490 yen.
The US President said at a press conference that he and Mr. Kim have forged “a special bond” and that he expects that the relationship the US has with North Korea will improve. He called the summit meeting “really very positive” and said that “a lot of progress” had been made.
Both the US dollar and the Korean won showed gains. Stocks in Europe also rose, with investors showing confidence after the summit. London’s FTSE, the Frankfurt DAX, the Paric CAC and the Dublin market were all higher.
However, the euro showed losses from its three week high, slipping down 0.2 per cent from $1.1840 to $1.1764. However, the European market stabilized after Italy announced yesterday that it would stay within the single currency system.
In Asia, markets in Tokyo and Hong Kong have also showed gains.
It looks like a busy week ahead for markets all over the world, since policy meetings are set for the European Central Bank on June 14 and the US Federal Reserve for June 12. The Brexit vote in London this week will also be affecting the market.
This week, the US Federal Reserve is also expected to raise interest rates for the second time this year.
However, not all experts are overly optimistic about the success of the Trump-Kim summit, given the proven history of failure concerning talks with North Korea. They said that the summit in Singapore had a low bar to clear because of this.
Many of them believe that the larger threat is the current tariff dispute stemming from Mr. Trump refusing to stand with the Group of Seven in a united front. He withdrew US support for a joint communique that had been previously committed to. Mr. Trump left the G7 summit in Canada last weekend ahead of other world leaders in order to fly to Singapore, the venue of his meeting with the North Korean leader.
Both France and Germany sharply criticized the US President for his actions.
Mr. Trump has also been critical of Justin Trudeau, Canada’s Prime Minister, calling him “very dishonest and weak.”