Escalation of US-China Trade Dispute Lifted the Dollar
On currency market, the euro fell to the lowest since mid-November ($1.1305), but recovered a bit soon. Sterling was the weakest main currency in all directions after Trump declared that the agreement on the United Kingdom’s withdrawal from the European Union could make trade between the United States and the UK more difficult. European majors, the euro and British pound are trading as the weakest ones.
The US dollar rose to its highest level in almost two weeks against major currencies, after President Donald Trump announced that he would promote tariffs on Chinese goods, which heightened concerns about tensions in world trade.
On stock market, FTSE fell 0.31%, DAX dropped 0.37%, CAC fell 0.32%. Earlier in Asia, Nikkei added 0.64%. But Hong Kong HSI, China SSE and Singapore Strait Times were down, by 0.17%, 0.04% and 0.10% respectively.
G20 leaders are scheduled to meet on Friday and Saturday in Buenos Aires and the escalating trade dispute between the United States and China is likely to be at the top of the agenda. European Commission President Jean-Claude Juncker and European Council President Donald Tusk outlined the key issues in a joint letter today, including global confidence, fair globalisation and trade, climate change and Africa-Europe.
The EU leaders also warned that “the rules-based multilateral trading system is facing a deep crisis” and the “entire system” is at risk. They also criticized that “the longstanding G20 commitments to keep markets open, to fight protectionism and support the multilateral trading system, risk becoming empty words.”