US Dollar and Stock Markets Broadly Lower Amid Possible Trade War
The euro is growing for the second consecutive day against the US dollar, updating the 3-day highs against the weakened American currency. The data released today on the Eurozone producer prices did not have a noticeable effect on the dynamics of the single currency. Eurostat said that PPI rose by 0.4% in January compared to the previous month, as economists expected, and by 1.5% year-on-year against expectations for growth of 1.6%.
The British pound was slightly higher against the dollar against the background of data on business activity in the construction sector in the UK. The growth in activity in the British construction industry increased slightly in February, led by the commercial sector, but the uncertainty associated with Brexit continued to negatively affect orders. UK construction PMI rose to 51.4 in February, exceeding forecasts of economists, who expected growth to 50.7.
US dollar and stock markets stay under pressure after Donald Trump’s statement. German DAX is trading down 2.2%, French CAC fell by 1.9% and UK FTSE decreased by 1.1%. That follows 2.5% decline in Japanese Nikkei. Donald Trump said a day earlier that the United States would impose import tariffs on steel and aluminum, raising concern about higher prices and a trade war. Trump said duties of 25% on steel and 10% on aluminum would be formally announced next week, sparking concerns of retaliatory moves from major trade partners such as China, Europe and neighboring Canada.
The British Prime Minister is set to outline her vision for a Brexit deal deeper and wider than any "free trade agreement anywhere in the world", telling the European Union it is in their "shared interest". In the much-anticipated speech which the EU hopes will offer details of her plan for Britain's future after Brexit, May will try to defuse a dispute over the border with Ireland that threatens to stall the Brexit talks.