Greenback Firm After US Slaps Section 301
The greenback has reinforced as today the US is evoking a 301 Section, slapping China with 34 billion dollars tariffs. China, in its turn, has retaliation measures ready.
According to Bart Wakabayashi (Tokyo branch manager for State Street Bank and Trust): "The tariffs did come into effect. But it will take three, six or 12 months before their impact becomes visible, and overall moves in key currency pairs have been subdued with the non-farm jobs report looming ahead".
The dollar index stood firmly at 94.388 versus its peers after having hit its minimum of 94.177. Aussie rose 0.15% at 0.7398 dollars. Dollar increased 0.05% to 110.735 against Japanese Yen. The single currency held at 1.1694 dollars after its lift by 0.3% to the maximum of 1.1721 dollars. Sterling remained at 1.3224 dollars after having touched its 9-day maximum of 1.3275 dollars. Chinese yuan dropped 0.2% to 6.6506/dollar. Overall, the currency hit 11-month minimum due to threat of a trade war.
Yukio Ishizuki (senior currency strategist at Daiwa Securities in Tokyo) noted: "Participants will be looking to shift their attention from trade matters to the U.S. non-farm payrolls and if the jobs report is strong, dollar/yen stands poised to rise and break out of its recent range".
Today’s focus is US NFP report. The projection suggests decline to 195K, wage growth is expected to stay at 0.3% and jobless rate is forecast to remain at 3.8%.