The US dollar is heading for the best week in three. The market sentiment is mixed as optimism about the global economic recovery was outshined by increasing tensions between the West and China.
China’s exports speed up notwithstanding escalating trade war
In July, China's exports managed to ascend more than anticipated notwithstanding American tariffs. As a result, its closely watched surplus with America was still near record maximums because the world's two leading economies ramped up a bitter clash that some worry could impact global surge.
In the recent move by US leader to apply pressure to the Chinese government to consider trade concessions, the US authorities are braced for collecting 25% duties on another $16 billion in China’s products on August 23.
On Wednesday, China’s data is expected to come up with the first readings of the entire trade picture for the world's number two economy, since American duties on $34 billion of China’s products came true on July 6.
Simultaneously, China's exports for July tacked on a bigger than anticipated 12.2% year-on-year, demonstrating little tariff influence for now and also surpassing June's 11.2% soar and experts’ hopes in a Reuters survey for 10% surge.
By the way, China's surplus with America dived just marginally to $28.09 billion in July from June’s record outcome of $28.97 billion. The US government has long criticized the trade surplus of China with America and has demanded the opponent reduced it.
Those demands could get even harsher if the Yuan's steep sink for the last time raises the anger of America that previously often criticized the Chinese government for manipulating its national currency for the purpose of gaining unfair trade advantages.
Market experts tell that China happens to be taking a more hands-off stance to its national currency that market its worst 4-month dive between April and July and also has ensured some reprieve for exporters against the backdrop of the soaring trade tensions.
Some financial analysts tell that the Chinese government will probably resist utilizing its closely managed asset as a tool in the trade dispute.
Rising yields, potential US tax hikes, and inflation fears worry investors. As a result, the market sentiment is risk-off. Stocks are falling, while the USD and the JPY are edging higher.
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The Australian economy has been on a steady recovery path, and now we have a very symbolic confirmation that S&P ASX 200 is about to cross 7000!
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The Reserve Bank of New Zealand will hold a meeting on Wednesday, April 14, at 05:00 MT.