China takes further step on the trade spat as it requests WTO for authorisation to impose sanctions on the United States.
China won a WTO ruling back in 2016 in a dispute it had initiated five years ago complaining about U.S. dumping duties on several industries. Washington did not comply with this ruling. Actually, last month the U.S. President threatened to withdraw from the World Trade Organization “if they don’t shape up”.
Trade concerns are increasing as the threats for tit-for-tat tariffs by Washington and Beijing on each other’s products are growing. Trade uncertainty prevails in the markets.
The world’s two largest economies have already imposed tariffs to $50 billion of each other’s goods since July. On Friday, President Trump threatened new tariffs on virtually all Chinese imports into the United States, i.e. duties on $267 billion of goods. China is ready to respond accordingly with counter-tariffs.
Further, the head of China’s market regulator said a trade war does not benefit China or the United States. He added that trade tensions can only be resolved through dialogue and negotiation.
Forex Market and Trade spat
It seems that markets haven’t yet fully priced in the impact of possible U.S. tariffs on virtually all Chinese import.
The Dollar edged up 0.1% against its major traded rivals. Forex markets remain nervous amid the US-Sino Trade spat.
The Euro edging higher 0.4% during the early trading, erased its gains to finally drop 0.1 % ahead of an ECB meeting later this week.
Although the Sterling hit a 5-week high in early trading, it dropped 0.2%. Following a volatile week and the biggest weekly drop in a month the pound fights to rebound amid Brexit concerns. It traded flat against the single currency.
The Japanese Yen fall 0.3% against the greenback.
Oil prices soar as trade war and Iran sanctions loom. Brent crude futures were up 60 cents a barrel, while U.S. crude futures rose by 25 cents from their last close.
Gold prices and silver prices rose following threats over a new round of China-U.S. trade tariffs. Spot gold and silver were up during the morning trade.
Sources: Reuters, CNN money, BBC
PLEASE NOTE The information above is not investment advice.