US dollar turned up after closing in red yesterday
The market sentiment is mixed, but there are still interesting movements on the market.
Trump imposes $50 billion tariffs on China’s goods
On Friday, American leader Donald Trump dared to impose hefty duties worth $50 billion on Chinese imports. In return the Chinese authorities pledged to adequately respond. So, it feels like a huge trader war between the world’s two leading powers is being actively ignited.
US President, whose tough stance on trade caused vigorous clashes with US allies, told that a 25% duty would be put on a list of crucial imports from China. Additionally, he considered further measures if the Chinese government struck again.
America and China started getting closer to a fierce trade conflict after several rounds of talks failed to tackle American complaints over Chinese industrial policy, market access as well as a $375 billion trade gap.
Trump's initial list contained up to 818 products worth $34 billion in China’s goods. As for the remainder of the $50 billion, it’s not determined yet.
US leader has triggered a trade conflict with other countries, including the European Union, Canada and Mexico over aluminum and steel. Moreover, Trump threatened to impose tariffs on EU vehicles.
The American government came up with a second list of probable duties on another $100 billion in China’s imports, expecting that China will most likely respond to the initial American duty list.
China has uncovered its own list of threatened duties on about $50 billion in American goods, including aircraft, cars and soybeans. The Asian country has told it would fight back if the US authorities came up with further measures.
China and America have held up to three rounds of high-level negotiations since early May that have yet to bring a long-awaited compromise. Trump has neglected China’s offer to purchase an extra $70 billion worth of American farm as well as energy products and also other goods, as sources familiar with the matter disclosed.
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Will sentiment remain risk-on on Monday?
Riskier assets and gold ended last week with huge gains due to the weak US dollar’s performance. Let’s discuss what will drive the markets today.
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The market is resilient ahead of the speeches of Fed’s Powell and ECB President Lagarde, but there are still interesting movements.
Uncertainty underpinned USD
The uncertainty over US fiscal stimulus and Brexit, and also rising new virus cases deteriorated the market mood. That’s why we can expect the further rally of the US dollar and the fall of riskier assets today.
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