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By xemarketanalysis July 19, 2018 1:41 pm
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    XE Market Analysis: Chinese Yuan and US Dollar Respond to Tariffs on Chinese Exports

    OVERVIEW

    • USD strengthens across the board.
    • European equities are lower.
    • GBP/USD is at 10-month lows.

    HIGHLIGHT

    China's central bank announced plans to weaken the Yuan as a means of stimulus in response to US tariffs imposed on Chinese exports. USD/CNY made new 1-year highs in response. 

    US DOLLAR

    The US Dollar has been well bid throughout the session, gaining ground against most major trading partners. The Dollar Index made fresh 1-year highs earlier in the day at 95.65.

    BRITISH POUND

    GBP made multi-month lows in both USD and EUR terms this morning, hurt by weaker than expected retail sales data. Despite this, interest rate markets are still pricing a 70% chance of a rate hike at the Bank of England's August meeting.

    EURO

    EUR/USD continues to drift back to the lower end of the recent range. German PPI, as well as Eurozone current account data tomorrow, will deliver the next short-term impetus for pricing. 

    CANADIAN DOLLAR

    Continuing global trade tensions have weighed on commodity prices, and the CAD by association. USD/CAD is currently at 3-week highs.

    AUSTRALIAN DOLLAR

    Aussie was buoyed overnight by strong employment data, before being dragged lower by the selloff in the Chinese Yuan. AUD often trades as a proxy for sentiment around China. 

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