Greenback Rose On Trade War Update
The greenback rose on renewed trade dispute. Donald Trump announced that instead of previously promised 10%, he might hit China with 25% tariffs on Chinese imports worth 200 billion dollars. The list could include food, chemicals, steel and aluminum, consumer goods. At first, Dollar/offshore Yuan declined to 6.770 minimum but then got back above 6.8. Loonie and Japanese Yen reinforced while Kiwi, Aussie and Swiss Franc dropped. 10 year Japanese Government Bond yield rose to 0.11%. Today’s most notable event is Fed’s rate announcement. Members are likely to stand pat, holding the federal funds rate at 1.75-2.00%.
British National Institute of Economic and Social Research published an article titled “Prospects for the UK Economy”. The NIESR said the economy is “facing an unusual level of uncertainty because of Brexit”. Such “uncertainty primarily stems from the yet to be defined relationship between the UK and the EU”, and “the economy’s response to the new framework once it emerges.” The case for tomorrow’s rate hike remained in store. The GDP should rise 1.4% in 2018, and 1.7% in 2019.
Japanese PMI manufacturing made up 52.3, revised up from 51.6. China Caixin PMI manufacturing fell -0.2, from 51.0 to 50.8 in July. The number marked an 8-month minimum. New Zealand employment increased 0.5% qoq in the second quarter Q2. Jobless rate grew 0.1% to 4.5%. Participation rate was up 0.1% to 70.9%. All sector wage inflation lifted 0.5%. Australian AiG performance of manufacturing index declined 52 in July.
Today, Eurozone will feature PMI manufacturing final, Britain will publish PMI manufacturing, Canada will present PMI manufacturing and the US will announce ISM manufacturing, construction spending and ADP employment.