· The euro held below the $1.10 level on Monday after Washington and Beijing put additional tariffs on each other’s exports over the weekend, adding to concerns over the economic outlook of the export-focused European economy.
With U.S. markets shut for a holiday on Monday, though, investors remained on the sidelines while looking to see what expansionary policies the European Central Bank and the U.S. Federal Reserve could unveil this month.
The United States slapped 15% tariffs on a variety of Chinese goods on Sunday — including footwear, smart watches and flat-panel televisions — while China imposed new duties on U.S. crude oil.
Versus the dollar, the euro edged 0.1% lower at $1.0977 after falling below $1.10 on Friday for the first time since May 2017.
Elsewhere, the dollar index which measures the greenback’s performance against a basket of six major currencies was broadly steady at 98.87.
· China has lodged a complaint against the United States at the World Trade Organization over U.S. import duties, the Chinese Commerce Ministry said on Monday.
The United States began imposing 15% tariffs on a variety of Chinese goods on Sunday and China began imposing new duties on U.S. crude oil, the latest escalation in their trade war.
China did not release details of its legal case but said the U.S. tariffs affected $300 billion of Chinese exports.
The latest tariff actions violated the consensus reached by leaders of China and the United States in a meeting in Osaka, the Commerce Ministry said in the statement. China will defend its legal rights in accordance with WTO rules, it said.
· A sense of nationalism is growing in China, and that could bolster support for those hoping to wait out the trade dispute with the U.S., said Max Baucus, a former American ambassador to China.
“Don’t forget … Chinese (are) very patient historically, they’ll wait it out, they’ll play lots of different angles. They’re going to try to hang in there, waiting for President (Donald) Trump to come to them,” he told CNBC on Monday.
“There’s a feeling that nationalism is getting a little stronger … I think that’s also emboldening President Xi,” said Baucus, who served as ambassador to China from February 2014 to January 2017, under former President Barack Obama’s administration.
In fact, the sentiment on the ground in China is that Beijing could be in it “for the long haul,” he said. “The Chinese (are) beginning to want to wait out Trump,” said Baucus. He added that China might be perceiving that the U.S. is in a weaker position — its economy might be worse than current indications, and American farmers appear to be taking a big hit from the tariffs.
· U.K. Prime Minister Boris Johnson said Monday that chances of striking a deal to leave the European Union have increased as he insisted Britain would not delay its exit from the bloc again.
In a statement following an emergency meeting with his cabinet, Johnson urged members not to vote this week for legislation to block a no-deal Brexit. In that scenario, the U.K. would leave the EU without an agreement in place for exactly how the breakup would work.
Casting any more delays as “pointless,” the prime minister said “we will not accept any attempt to go back on our promises and scrub” Britain’s referendum vote in favor of leaving the EU. Britain is due to leave the bloc on Oct. 31.
“We’re leaving on the 31st of October, no ifs or buts. We will not accept any attempts to go back on our promises,” he said.
The pound dropped against the dollar earlier Monday amid speculation that Johnson could call for a general election if opposition lawmakers vote against a no-deal Brexit this week. But the prime minister said he hoped to resolve the U.K.’s messy divorce from the EU without a snap election.
“I don’t want an election. You don’t want an election,” Johnson said.
· Britain’s Brexit Minister Stephen Barclay said in an interview with several European newspapers published on Monday that the European Union should be open to “creative and flexible” solutions to the Irish border question.
The EU’s top negotiator is pessimistic about avoiding a no-deal scenario as the bloc is not budging on Britain’s demand to remove the so-called “backstop”, ensuring an open border between Ireland and Northern Ireland, from the withdrawal pact.
· U.S. congressional Democrats are planning to investigate allegations of President Donald Trump’s involvement in hush-money payments to women who say they had affairs with him, the Washington Post reported on Monday.
· South Korea’s year-on-year inflation in August dipped to an all-time low as farm product prices plunged on improved weather and consumer demand remained weak, strengthening the case for another central bank rate cut as early as next month.
· The consumer price index was unchanged in August from a year earlier, Statistics Korea data showed on Tuesday, missing a 0.2% rise tipped in a Reuters survey and marking the lowest since the country began releasing inflation data in 1965.
Separately, the Bank of Korea (BOK) on Tuesday revised down the economic growth for the April-June period to 1.0% on-quarter from a 1.1% gain reported earlier, citing weaker exports than estimated earlier.
The weak inflation and economic growth data add to concerns about a deflation risk for Asia’s fourth-largest economy, despite assurances from top policymakers that inflation would soon pick up to 1%.
· Oil prices weakened on Monday after new import tariffs imposed by the United States and China came into force, raising concerns about a further hit to global economic growth and demand for crude.
Brent crude was down 64 cents to $58.61 a barrel at 2:24 p.m. EDT (1824 GMT), while U.S. benchmark WTI crude was down 33 cents at $54.77 a barrel. Activity was thin due to the U.S. Labor Day public holiday.
Reference: CNBC, Reuters
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