Dollar soars as US/China tariffs cut
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Daily Currency Update
The US dollar soared across the board yesterday as the the US and China agreed to a huge reduction in tariffs in a sudden reversal of the standoff initiated by Donald Trump last month. In talks in Geneva, both countries agreed to slash tariffs by 115% taking them to a current level of 30% for Chinese goods entering the US and 10% for US goods entering China. The reduction is only temporarily with a 90-day expiry date so things could ratchet up again however, it seems both sides are willing to negotiate away a situation which was going to cause each country huge economic damage. The reaction in foreign exchange was dramatic with the US dollar making huge gains. EUR/USD is currently just above 1.11, a drop of around 1.5 cents since the start of the week. GBP/USD mirrored the move lower with the pair currently at 1.32.Key Movers
Later today we have the latest reading of US CPI which is expected to show price rises held steady at 2.4% y/y. This morning we have had some better than expected UK employment data with fewer people seeking employment in April and wages rising slightly more than expected in March. Developments re: trade tariffs will continue to be the main driver of markets however.Expected Ranges
- GBP/USD: 1.3140 - 1.3300 ▼
- GBP/EUR: 1.1770 - 1.1925 ▲
- GBP/AUD: 2.0530 - 2.0700 ▼
- EUR/USD: 1.1060 - 1.1220 ▼