July 12, 2020

USA restores tariffs on steel and aluminum imports

LQDFX Forex news Blog USA restores tariffs on steel and aluminum imports

Share this article

U.S. President Trump said he would restore tariffs on U.S. steel and aluminum imports from Brazil and Argentina with a morning tweet.

Trump accused Brazil and Argentina of a “massive devaluation” of their currencies and said he would immediately restore tariffs.

Metal tariffs overshadowed data showing that the Chinese and euro zone economies were stabilizing.

Chinese factory activity expanded at the quickest pace in almost three years in November, a private business survey showed on Monday, following upbeat official data over the weekend. The survey also showed total new orders and factory production at buoyant levels.

On the Brexit front, three and a half years after Britain voted to leave the EU, markets still don’t know whether the third Brexit deadline will be met on Jan. 31. Trump leaves for a NATO summit in London and he is under pressure from British Prime Minister Boris Johnson to resist the temptation to wade into the British election campaign.

Further, the final British manufacturing purchasing managers’ index was revised to 48.9 for November, up from 48.3 in October, where it was expected to stay, without much effect on the pound.

Another PMI survey published on Monday showed euro zone manufacturing activity shrank for a 10th consecutive month in November. But it also signaled that the worst may be over.

Forex – USA restores tariffs on steel and aluminum imports

The latest data out of China, the world’s second biggest economy, set the tone for currency markets.

The U.S. dollar scaled a six-month high versus the Japanese yen.

The Canadian dollar weakened against its U.S. counterpart trading 0.1% lower at 1.3295, ahead of BoC rate decision.

The Japanese yen fell to a six-month low on Monday. The safe-haven yen fell to 109.73 per dollar, its lowest since May and was last down 0.2% at 109.63.

The Australian and New Zealand dollars rallied after an unexpected rebound in Chinese manufacturing activity raised hopes of a brighter outlook for the world economy.

The Australian dollar gained to a one-month high at $0.6460. Analysts said the currency was also buoyed by talk of fiscal stimulus to boost the New Zealand economy.

New Zealand’s currency jumped to near four-month peaks on Monday at $0.6475 as it was up 0.75% on the day.

The euro was steady ahead of a testimony to the European parliament later in the day by the ECB’s new president. The euro was steady at $1.1017 before Lagarde’s testimony.

A tightening British election race knocked the pound lower. The sterling was down a fifth of a percentage point at $1.2919. Polls pointed to a narrowing lead for the governing Conservative Party before the UK’s Dec. 12 election. Sterling was last down 0.3% at $1.2907. It was 0.2% weaker at 85.34 pence against the euro.

Oil jumped above $61 a barrel on Monday, supported by hints that OPEC and its allies may agree to deepen output cuts. Brent crude, the global benchmark, rose $1.13 to $61.62 a barrel by 1426 GMT. U.S. West Texas Intermediate (WTI) crude added $1.07 to $56.24.

PLEASE NOTE The information above is not investment advice.

Sources: Reuters, Investing, CNN money