July 1, 2022

Trade War Update: EU not to give in to trade threats

EU-USA Trade talks: EU not to give in to trade threats

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EU-USA Trade talks: EU not to give in to trade threats

The German Foreign Minister said that EU members must stick together and not give in to US trade threats regarding tariffs.

The comment came before Jean-Claude Juncker’s visit to the States for talks with the U.S. President.

The talks will focus on trade tensions after Trump decided to impose 10% and 25% tariff on imported steel and aluminium, respectively, from EU. Τrump also threatened to impose a 20% tariff on all imports of EU-assembled cars, characterising EU as a trade “foe”.

USA-Iran: Tweet-for-tweet

The Iranian Foreign Minister tweeted back to the ALL-CAPS Trump’s tweet following the same style used by the US President.

Mohammad Javad Zarif warned the USA back signalling new USA-Iran tensions. Iran foreign ministry also stated that Tehran will respond with equal countermeasures if US tries to block its oil exports. Rising tensions between the two countries may herald oil supply risks.

Iran has faced increased pressure following Trump’s decision on pulling the States out of the international 2015 Iran nuclear Deal. Washington initially planned to shut Iran out of global oil markets. However, United States has somewhat eased its stance by granting sanction waivers to some allies that particularly rely on Iranian supplies.

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FOREX – Currencies and commodities

The dollar remained almost unchanged amid expectations the FED would persist with its rate hikes this year. Demand for the greenback remained steady despite Trump’s expressed concerns about a stronger currency.

The Yen traded flat against its major traded rivals as traders’ expectations that BOJ may downsize its monetary stimulus dashed.

The Euro edged up towards a 2-week high following PMI data. However, fears linked to trade war limit the common currency’s gains.  

The Sterling slightly recovered from last week’s 10-month lows against US dollar amid Brexit concerns which capped gains. The pound is set for more volatility as a “hard” Brexit is more likely to take place. However, the Sterl (GBP) rose against the common currency as well.

Oil prices remained almost unchanged amid concerns over supply following USA-Iran threats and an escalating trade war.

Gold extended losses for a second day in a row amid a weak global trend, largely hit by a stronger dollar.

Sources: Reuters, CNN money, the guardian

PLEASE NOTE The information above is not investment advice.