USD Steady Amid US-China Trade Conflict

Market Reviews

Japanese yen and Swiss franc are trading as the strongest ones for today on risk aversion. The global stocks fell. FTSE lost 0.58%, DAX dropped by 0.75% and CAC fell by1.04%. HK HSI decreased by 0.98%, Shanghai SSE was down 0.46%. Nikkei dropped by 0.02%.

The US dollar gets support, as investors prepare for the next round of the US-China trade conflict. Last week, the US and China introduced reciprocal tariffs for each other's goods worth $16 billion. In July, both countries also introduced tariffs for each other's imports amounting to $34 billion. It was reported earlier, that that US President wants to impose tariffs on another $200 billion worth of Chinese goods as early as next week. The tariffs could go into effect after the public-comment period ends on September 6.

Ewald Nowotny (ECB Governing Council member) said “the economic policy of the United States is currently one of the substantial risks to the global economy.” And he warned that unpredictable trade and economic policy, biased rulings in US courts and the dominant role of the Dollar were bad for Europe.

Nowotny, who is also Austria’s central bank governor, stated, that the European Central Bank should adopt a firmer line in normalizing its ultra-easy monetary policy and focus on getting its deposit rate out of negative territory.

Eurozone CPI fell to 2% in August from 2.1% in July. Core inflation, which excludes energy, food, alcohol and tobacco, slowed to 1% from 1.1% a month ago. Unemployment rate in the Eurozone remained unchanged at 8.2% in July.

Today’s data also showed, that Canada IPPI dropped by 0.2% mom in July, RMPI rose 0.7%. UK Gfk consumer confidence improved to -7 in August, up from -10 in July. Japan industrial production fell by 0.1% mom in July versus expectation of 0.3% growth. China official PMI manufacturing rose 0.1 to 51.3 in August, above expectation of 51.0. Official non-manufacturing PMI rose 0.2 to 54.2, above expectation of 53.8.