US-EU Taxation were at the heart of the debate at the World Economic Forum in Davos.
U.S. Treasury Secretary and his British counterpart clashed over taxation in a brewing battle over how Europe taxes the world’s biggest technology firms.
Several European nations are considering taxes on search engines, social media platforms and online marketplaces to compensate for lost revenues. U.S. which claims that such a tax unfairly targets US firms. France, which considered a similar tax, agreed this week to suspend down payments for this year’s digital tax.
Britain’s Javid said Britain would not back down. Moreover, Britain and the EU can reach a long-term trade deal covering both goods and services by the end of 2020.
Trump said he expects to be able to make a trade deal with Europe. He added that negotiating an agreement is in many ways tougher than the trade pact he brokered with China. Also, he threatened to impose high tariffs on imports of cars from the EU if the bloc doesn’t agree to a trade deal.
On top of that, Trump vowed dramatic action with the World Trade Organization as well.
Investors will keep a close eye on the European Central Bank’s first policy meeting of the year on Thursday. Further, the Fed’s first meeting is scheduled for Jan. 28-29.
START TRADINGForex – US-EU taxation and Central banks in focus
Broader currency markets were trapped in tiny ranges, with concerns that the coronavirus outbreak in China could trigger a pandemic leading to some demand for safe-haven assets.
The euro remained at a one-month low amid expectations ECB policymakers would strike a cautious tone when they met. Against the dollar, the euro was weaker at $1.1077, its lowest since Dec. 25. It has weakened more than 1% so far this month.
The concerns surrounding the little-known virus propped up the safe-haven yen, which traded at 109.98 yen, up from Tuesday’s low of 110.23.
Swiss franc fell on Wednesday on signs the central bank may be intervening to stop it rising further. The franc dropped against both the dollar and euro, falling as much as 0.5% against the single currency. Against the dollar it was down 0.2% at $0.97055.
The Australian dollar fell as low as $0.6827, a trough last seen in mid-December, and last stood at $0.6837, down 0.13%.
Britain’s pound rose on Wednesday against the dollar and the euro. Investors debated whether or not the Bank of England would cut interest rates when it meets next week.
Gold was little changed on Wednesday. Strong technical support on expected dovish monetary policy from global central banks offset revived appetite for riskier assets. Spot gold was 0.1% firmer at $1,558.55 an ounce by 1051 GMT. U.S. gold futures were steady at $1,558.50.
Silver edged up 0.4% to $17.85.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money