· Trump sets tariffs on $50 billion in Chinese goods; Beijing strikes back
U.S. President Donald Trump said he was pushing ahead with hefty tariffs on $50 billion of Chinese imports on Friday, and the smoldering trade war between the world’s two largest economies showed signs of igniting as Beijing immediately vowed to respond in kind.
Trump laid out a list of more than 800 strategically important imports from China that would be subject to a 25 percent tariff starting on July 6, including cars, the latest hardline stance on trade by a U.S. president who has already been wrangling with allies.
China’s Commerce Ministry said it would respond with tariffs “of the same scale and strength” and that any previous trade deals with Trump were “invalid.” The official Xinhua news agency said China would impose 25 percent tariffs on 659 U.S. products, ranging from soybeans and autos to seafood.
China’s retaliation list was increased more than six-fold from a version released in April, but the value was kept at $50 billion, as some high-value items such as commercial aircraft were deleted.
· China state media condemn U.S. tariffs, leave room for negotiation
The U.S. dollar edged lower against the Japanese yen on Friday, as President Donald Trump announced hefty tariffs on $50 billion (£37.6 billion) of Chinese imports and Beijing threatened to respond in kind, raising tensions between the world’s two largest economies.
· The dollar slipped 0.05 percent to 110.57 yen, retreating from a three-week high of 110.9 yen. The yen, a perceived safe haven often sought in times of geopolitical tensions and market turmoil, had touched a more than three-week low against the greenback earlier in the session.
The dollar index, which measures the greenback against a basket of six major currencies, was little changed on the day at 94.761. For the week, the index was up 1.3 percent, its best weekly performance in seven weeks.
As of writing the index is losing 0.18% at 94.75 and a breach of 93.97 (21-day sma) would open the door to 93.92 (10-day sma) and then 93.21 (low Jun.6). On the other hand, the next hurdle emerges at 95.14 (2018 high Jun.15) seconded by 95.15 (high Nov.6 2017) and finally 96.51 (high Jul.4 2017).
· The euro recovered some ground against the dollar, a day after the European Central Bank signalled it would keep interest rates at record lows into the summer of 2019, prompting the common currency to fall nearly 2percent drop.
The euro was 0.35 percent higher at $1.1608.
· Japan’s exports rose 8.1 percent in May from a year earlier, Ministry of Finance data showed on Monday, suggesting a pick-up in global demand.
The rise was more than the 7.5 percent increase expected by economists in a Reuters poll. It followed a 7.8 percent year-on-year rise in April.
Imports rose 14.0 percent in the year to May, versus the median estimate for an 8.2 percent increase.
The trade balance came to a deficit of 578.3 billion yen ($5.23 billion), versus the median estimate for a 235.0 billion yen deficit.
· Oil prices fell more than $2 a barrel Friday after two of the world’s biggest producers indicated they might increase output at next week’s OPEC meeting, while U.S. exports were threatened by potential Chinese tariffs on crude oil and refined products.
Oil investors have been nervous ahead of the coming OPEC summit in Vienna. Saudi Arabia and Russia have already boosted production modestly, and have indicated they were prepared to increase output at that meeting.
Brent crude oil LCOc1 fell $2.50, or 3.29 percent to settle at $73.44 a barrel. U.S. crude CLc1 settled $1.83 lower at $65.06 a barrel. In post-settlement trading, U.S. crude retreated further, falling 2.25, or 3.4 percent, to$64.64 a barrel.
Brent crude was on track to end the week down more than 4 percent, while U.S. crude was heading to fall 1.7 percent.
Reference: Reuters, FXStreet
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