US Dollar Stabilizes Amid Escalation of US-China Trade War
US dollar strengthens today versus major currencies after two weeks of losses. The dollar index rose by 0.1% to 94.37. The American currency moves higher in anticipation of the Fed rate hike on Wednesday. The US central bank is expected to raise its interest rates on Wednesday, which are expected to reach between 2% and 2.25% for the first time after ten years of accommodative monetary policy.
The dollar was also boosted after Beijing released a white paper on the trade dispute saying it would seek a reasonable outcome, while also describing US tactics as "bullying". Meanwhile, the US tariffs on Chinese goods worth $200 billion and Beijing's response tariffs on US products worth $60 billion will begin to operate today.
The euro remains steady today, with the EUR/USD pair at $1.1745 level. The British pound was the biggest gainer against the dollar today, with the British currency rising half a percent against the dollar above the $1.31 line after latest comments by British Brexit Secretary Dominic Raab. Raab said that he was confident that the United Kingdom will make progress and eventually clinch a Brexit deal with the European Union.