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By xemarketanalysis March 16, 2018 12:12 pm
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    XE Market Analysis: World Economy Threatened by Steel and Aluminum Tariffs

    OVERVIEW

    • US Dollar retreats as Trump replaces national security advisor.
    • Sterling holds ground on optimistic Brexit talks tone.
    • Canadian Dollar will be glad to see the end of this week.
    • The Euro vulnerable as steel and aluminum tariffs worry investors.

    HIGHLIGHT

    The steel and aluminum tariffs due to take effect next Friday continue to be the main point of focus in the world markets. There has been a scurry of activity with many senior officials from across the globe flying to discuss the implications of the tariffs with the Trump administration. 

    US DOLLAR

    The US Dollar fell further against the Japanese Yen as the Trump administration continues to be plagued with staff turnover. Donald Trump is looking to replace his national security advisor in less than a week after replacing Rex Tillerson. The Dollar looks vulnerable heading into the weekend as metal tariffs continue to worry international markets. 

    BRITISH POUND

    The Pound is marginally stronger across the board as markets take an optimistic/more positive tone on the possibility of a good outcome from the EU Summit next week, arriving at an agreement for the transition period after Brexit. 

    EURO

    The Euro is weaker as German trade minister Altmaier is set to fly to the US on Sunday to stop tariffs on steel and aluminum hampering the European economy. The EU commission has now tabled a list of goods that retaliation tariffs could be levied against.

    CANADIAN DOLLAR

    The Loonie ends the week battered and bruised, having been sold when the head of the Bank of Canada said they can take their time raising interest rates after having hiked rates three times since mid-2017. On top of this, it seems unlikely that the Canadian Dollar will show much progress until the steel tariff issue has been resolved. 

    AUSTRALIAN DOLLAR

    The Aussie and Kiwi’s Dollar have had another tough week as the risk trade has been unwound on the back of what many consider "protectionist" policies coming out of the Trump administration in the US. The Japanese Yen and Swiss Franc have been bought as a haven at the expense of the likes of the Aussie and Kiwi Dollar. 

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