USD Higher on Continuing Trade Tensions

USD Higher on Continuing Trade Tensions

USD Higher on Continuing Trade Tensions

$USD, $AUD, $EUR, $JPY, $CNY

Friday, US President Donald Trump warned that he is ready to slap tariffs on virtually all Chinese imports into the United States, threatening duties on another $267-B of goods in addition to the $200-B already facing the risk of duties.

The US Dollar (.DXY) Index, which measures the Buck against a basket of 6 peer currencies, traded about 0.1% higher at 95.425 as of 0310 GMT, moving toward a 3-week high of 95.737 hit on Tuesday last week.

.DXY advanced more than 0.3% Friday after data showed US job growth picked up in August and wages recorded their largest annual gain in more than 9 years.

The strong data further supported the prospect of faster rate rises by the Fed, boosting demand for USD.

The Fed is all but certain to raise rates a 3rd time this year on 26 September.

Investors have been waiting for a fresh shots to be fired in the Sino-US trade dispute after a public comment period for proposed US tariffs on a list of $200- worth of Chinese imports, which includes some consumer products, ended Friday Midnight.

An emerging market currency index slipped Monday after booking its biggest weekly loss in 3 weeks last week.

Further tariffs are likely to lead to a weaker RMB Yuan and stronger USD, and I think emerging market currencies will fall in response.

If emerging market currencies in Asia decline, other emerging units are likely to fall too. When the atmosphere becomes risk off, the yen is likely to strengthen.

China’s offshore RMB Yuan was nearly flat at 6.8701 RMB Yuan per USD in mid-morning trade. It had weakened more than 0.3% during the prior trading session.

The Australian Dollar (AUD) was barely changed at 0.7107, pinned near a 2.5 year low of 0.7097 touched earlier in the day.

The USD was nearly Unchanged against the Japanese Yen at 110.98 per dollar.

The EUR was a bit lower at 1.1550 after falling more than 1/2% during the prior session in the wake of the US job data.

Have a terrific week

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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