US Dollar Rallies Amid Trade War Escalation
The US dollar remains the strongest one today. Australian dollar and New Zealand dollar stay the weakest ones for today. Canadian dollar is also unsteady as markets await BoC rate hike. European shares fell, as trade tension between the US and China is escalating. FTSE lost -1.1%, DAX fell -1.3% and CAC down -1.1%.
The US administration announced its intention to introduce an additional 10% duty on Chinese goods valued at $200 billion following the introduction last week of duties on Chinese machinery and equipment, parts and electronics worth $34 billion. It is also planned to impose duties on electronic and other components worth $16 billion.
After reports of the introduction of new fees by Washington, China’s Foreign Ministry spokesperson Hua Chunying said in a regular briefing that “US behavior is a typical trade bullying”. And, China will make the “necessary counter-measures and resolutely safeguard its legitimate rights and interests”.
The Bank of Canada will announce its rate decision today. The latest economic data, as well as the statements of Governor of the Bank of Canada Stephen Poloz, make experts predict that the central bank today will raise the key interest rate from the current level of 1.25% to 1.50%.
US PPI rose 0.3% mom, 3.4% yoy in June, above expectation of 0.1% mom, 3.2% yoy. PPI core rose 0.3% mom, 2.8% yoy versus expectation of 0.2% mom, 2.6% yoy. Released earlier today, Australia Westpac consumer confidence rose 3.9% in July. Home loans rose 1.1% mom in May. Japan domestic CGPI rose 2.8% yoy in June. Machine orders dropped -3.7% mom in May. Tertiary industry index rose 0.1% mom in May.