Let's consider the key events for this week's trading
Germany maintains huge surplus with America notwithstanding trade clashes
In the first year of 2018, Germany's exports to America accounted for 24.4 billion euros. It’s more than Germany’s imports of American products. That’s what the Federal Statistics Office disclosed on Friday.
The trade surplus amounted to 100 million euros, which is less than in 2017. However, it means that Germany boasts the largest trade surplus with America than any other state, although US leader wants to have it reversed.
Moreover, the European country’s trade surplus has also been mocked by the IMF that told that it actually contributes to trade clashes and increases risks, thus undermining global financial stability.
The trade surplus of Germany with the entire world accounted for 121.5 billion euros in the first half of 2018. It’s a bit higher than in 2017.
The International Monetary Fund asked the German authorities to spur investments beyond the level officially agreed by Chancellor Angela Merkel's cabinet that plans to lift spending by 4% in 2018. Eventually, higher government allocation would drive imports.
US leader hit Canada, Mexico and the European block with duties of 25% on steel as well as 10% on aluminum in the beginning of June, terminating exemptions, which had been imposed in March. Canada and also the European Union fought back with their own tariffs on American products.
China imposed duties on American products responding to Trump’s duties on China’s products, puzzling German producers used to relying on the world’s two major economies for surge.
Worries of a full-fledged trade feud between the European Union and America receded after the previous month US leader agreed to stay away from slapping duties on vehicles imported from the European Union while the two sides discuss cuts to other trade obstacles.
For the first six months of 2018, Germany's exports to America rallied by 0.8% hitting 56.1 billion euros.
There were no major moves during the Asian trading session, however we have some events today, which may affect the sentiment in the market.
The risk sentiment remains under pressure after the comments by China about the countermeasures against the US tariffs. Thus, the AUD/USD and the USD/JPY pairs will be under our attention.
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