The U.S. President Donald Trump said he thinks there will be “a great deal” with China on trade. Otherwise he warned new tariffs if a deal fails, opening a new chapter in the US-Sino trade war.
Trump said in an interview on FOX he would like to make a deal now, but that China was not ready. Further, according to Bloomberg, Washington is about to announce tariffs on all remaining Chinese imports if talks next month between Trump and his counterpart fail.
Following the fresh U.S. tariffs which came into force on the 24th of September the traders focus on the next phase.
Concerns about an escalating trade war and a Chinese economic slowdown hit the yuan which dropped to a 22-month low. The onshore currency slid to its weakest in 10 years.
Forex – Commodities – US-Sino Trade War hits the yuan
The dollar rose 0.3% to a 10-week high on Tuesday as China-USA trade war escalates. The US economy out-performance, the euro zone poor performance and a lower euro affected the greenback’s rise.
The Yen extended further losses against the greenback dropping 0.4% ahead of the BoJ monetary policy meeting due Wednesday.
The Sterling dropped 0.2% to 10-week low as Brexit talks do not progress just five months before Britain’s departure. The pound also lost ground against an otherwise under-pressure euro, falling to a one-month low of 89 pence. Traders are focusing on the BoE’ s monetary policy meeting on Thursday.
The euro dropped 0.2% to $1.1345, after reaching a 10-week low on Friday. The euro zone performance and economic confidence dropped. On Monday, the single currency dropped when the German Chancellor Angela Merkel announced that she would not be seeking re-election. EU-Italian tension also weighed to euro weakness.
Oil prices dropped on Tuesday, as supply rose but limited by trade tensions between the USA and China. US Sanctions against Iran did not weigh. The prices are around $10 a barrel below four-year highs reached in the first week of the month. Brent crude oil dropped 70 cents to $76.64 a barrel. U.S. crude CLc1 was 50 cents lower at $66.54.
Sources: Reuters, CNN money, BBC
PLEASE NOTE The information above is not investment advice.