Home Daily Commentaries US dollar plunges after Chinese retaliation

US dollar plunges after Chinese retaliation

Daily Currency Update

USD - United States DollarThe US dollar fell 0.25 percent after China indicated that it would raise tariffs 25 percent on approximately US$ 60 billion worth of US imports in response to the US tariffs on $200 billion of Chinese goods from June 1. China is increasing tariffs on roughly 5,000 products, which include animal products, frozen fruits and vegetables, and seasonings. The Chinese Ministry of Finance said in a statement that “China’s adjustment of tariff-adding measures is a response to US unilateralism and trade protectionism.” China had threatened last week to retaliate. President Trump tweeted once more over the weekend to tell China to get a deal done now because he anticipated the terms would not be good after he wins re-election in 2020.

Key Movers

Market participants were anticipating another period of market volatility to come as gold, the Japanese Yen and US treasuries go higher in a search for safety. Market participants around the globe are starting to scramble to understand the new playbook. Moreover, bets on a Fed rate cut have gained momentum again. China has invited US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to meet in China. However, this has not yet been confirmed by US officials. Trump and Xi Jinping are likely to engage in a straight talk during a G-20 meeting in Japan in June.

Expected Ranges

  • USD/CAD: 1.3416 - 1.3441 ▼
  • EUR/USD: 1.1208 - 1.1262 ▼
  • GBP/USD: 1.2981 - 1.3039 ▼
  • AUD/USD: 0.6950 - 0.6975 ▼
  • NZD/USD: 0.6567 - 0.6593 ▼