The US dollar is declining against the basket of major currencies. The US President, Donald Trump, violated a truce with China and announced the introduction of 10% tariffs on the remaining $300 billion of Chinese imports starting September 1. Trump emphasized that the new tariffs would include goods that had not yet been affected by tariffs. Also, according to the US President, 25% tariffs on $250 billion worth of Chinese goods are still in effect. As Trump said, in the future, tariffs could be raised even above 25%, depending on the progress of negotiations with Chinese President Xi Jinping. The decision by the US President has shocked financial markets. The US dollar index (#DX) closed in the negative zone (-0.22%). At the moment, financial market participants expect labor statistics from the US for July. We recommend paying attention to the difference between actual and forecasted values of the indicators.
China met the US decision with hostility. Chinese Foreign Minister, Wang Yi, believes that such a decision by Donald Trump regarding Chinese goods will become an obstacle in overcoming trade frictions between the two countries. As a result, the Chinese yuan has reached its lows since November 2018.
The British pound continues to decline. Yesterday, the Bank of England decided on the interest rate and left it unchanged at 0.75%, as experts expected. Optimistic data from the UK were also published yesterday. Thus, UK manufacturing PMI counted to 48.0 in July and was better than the expected value of 47.7. However, the British pound is under pressure due to the uncertainty concerning Brexit. Oncoming Brexit is increasingly putting pressure on the country’s economy.
The “black gold” prices are recovering after the collapse the day before. Currently, futures for the WTI crude oil are testing the $54.80 mark per barrel.
Market Indicators
- Yesterday, there were aggressive sales in the US stock markets: #SPY (-0.87%), #DIA (-1.03%), #QQQ (-0.50%).
- The 10-year US government bonds yield has updated lows for the first time in 2.5 years. At the moment, the indicator is at the level of 1.83-1.84%.
The news feed for 2019.08.02:
- UK construction PMI at 11:30 (GMT+3:00);
- US labor market data at 15:30 (GMT+3:00).
