The dollar fell on Monday after White House economic advisor Kudlow said that additional tariffs against China were forthcoming. And they were, as later in the day US President Trump announced tariffs on $200 billion of Chinese goods, adding that if China retaliated he’d impose a further $267 billion of tariffs on imports. If anything though, the USD has recovered slightly as risk is sold.
On the data front yesterday, the New York Empire manufacturing index fell from a ten-month high of 25.6 in August to a five-month low of 19.0 in September. Some fall in the index was not surprising, given the toll the trade wars could be having on confidence. The index however, is volatile, and the sub-indices on activity remain elevated.
Looking ahead, the economic calendar is fairly light, but attention turns to China as traders will keen to hear what the response, if any, will be to the US action. We’re already hearing various comments albeit there’s been no immediate concrete action taken as of yet.