The two economic giants completed trade talks on Thursday among mid-level officials, without any major breakthroughs, as it was widely expected. New tariffs kicked in on $16 billion worth of imports from China by the USA, followed immediately by reciprocal tariffs from China.
The duties of up to 25% form part of Trump’s efforts to pressure Beijing to end harmful trade practices. However, unlike previous rounds of U.S. tariffs, consumer products could be directly hit by this batch.
Most businesses argued that the new tariffs will cause higher costs for everyday products, while the previous tariffs hit mainly industry. A small number of the business sector praised such measures or asked that to extend them to other products.
Implementation of the latest 25% tariffs on Thursday did not overturn the talks. However, the entire tariff saga does not help at all. Both sides selected carefully their wording and made minimal statements.
According to the Finance Minister of China the world’s second largest economy will keep hitting back as U.S. imposes more trade tariffs. However, he stated that its counter-strikes will remain as targeted as possible to avoid harming businesses in China.
Forex Market – Hard week for the US dollar setting for its biggest weekly decline since March
The Dollar index fall 0.3% against its major traded rivals ahead of Fed chairman’ speech and clues about new rate hikes. There is special focus on Powell’s speech following Trump’s recent criticism on Fed’s decisions on interest hikes.
The Australian Dollar gained almost 0.5%, recouping some losses, after Australia’s ruling party elected a new leader. Political uncertainty hit severely the Aussie which lost almost 1.4% on Thursday.
The Euro strengthened 0.4% against the greenback, recovering from almost 0.5% fall during the previous session due to political contradictions within EU.
The Sterling remained mainly unchanged after losing more than 0.7% in the previous session amid traders’ concerns for no-deal Brexit.
Oil prices rose. Brent crude futures rose over 1%, while U.S. crude futures rose 1.2. Indications that the global crude supply is less due to US sanctions on Iran boosted such increase.
Sources: Reuters, CNN money, BBC
PLEASE NOTE The information above is not investment advice.