0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Mixed
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Breaking news

Australia added 114.7k jobs in July, beating 30.0k estimate. Unemployment rate fell to 7.5%, outperforming the 7.8% estimate

Real Time News
  • A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. Find out if the carry trade suits your trading style here:https://t.co/sR7HqpK8BI https://t.co/PSyPSFwSQq
  • - #Crudeoil prices could get a tailwind from newly growing US-#Iran political risks - Washington is seeking to extend an arms embargo beyond its October deadline - #Geopolitical tensions are not unfamiliar to oil traders, but is this time different? https://www.dailyfx.com/forex/fundamental/article/special_report/2020/08/13/Crude-Oil-Prices-Brace-for-Impact-with-US-Iran-Tensions-Brewing.html
  • Why financial market traders must monitor both monetary and fiscal policy? Find out from @MartinSEssex here:https://t.co/Fkzk88Y5gm https://t.co/RD5jfhST15
  • If you missed today's live coverage of the Australian jobs reports where I discussed recent price action and the trajectory of $AUDUSD, $AUDJPY and $AUDNZD, check out the recording on YouTube here - https://t.co/DFtslv9p9J
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Silver: 1.36% Gold: 1.08% Oil - US Crude: -0.07% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/D73pACW7Wo
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.20% 🇬🇧GBP: 0.19% 🇨🇭CHF: 0.14% 🇦🇺AUD: 0.07% 🇨🇦CAD: 0.04% 🇳🇿NZD: -0.08% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/iWfve22mC7
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 95.74%, while traders in US 500 are at opposite extremes with 78.31%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/pr60jYN4lU
  • Are we witnessing a positive month for the FTSE as bulls take control? Find out here: https://t.co/j89IW0WMY7 https://t.co/JECJAfuFJW
  • #AUDUSD edged slightly higher after better-than-expected jobs report https://t.co/1sG8q6hGcc
  • 🇦🇺 Full Time Employment Chg (JUL) Actual: 43.5K Previous: -38.1K https://www.dailyfx.com/economic-calendar#2020-08-13
US-China Trade War Rhetoric Ramps Up; Gold Price Remains Weak

US-China Trade War Rhetoric Ramps Up; Gold Price Remains Weak

2018-08-02 08:58:00
Nick Cawley, Strategist
Share:

US - China Trade Wars

  • Trump mulling tariff hike on $200 billion of Chinese goods.
  • Gold unmoved – Chinese Yuan remains weak.

The DailyFX Q3 US Dollar Forecast is available to download.

US Eyeing Increased Tariffs on Chinese Goods

The US is considering increasing tariffs on $200 billion of Chinese goods – from 10% to 25% - as Washington turn up the dial in the increasingly acrimonious US-China trade war. In response to these ‘rumors’ China said that they would respond with their own countermeasures, adding that any talks between the two sides to ease trade tensions must be based on mutual respect and trust.

The financial markets however have seemingly ignored the noise from Washington and Beijing with risk-off assets little changed. The effect of any hike by the US in tariffs on Chinese goods can normally be seen quite clearly in a depreciation of the Chinese Yuan against the US dollar – the devaluation helps cover the tariff bill – but the pair remain stable around 6.83.

DailyFX senior currency strategist @CVecchioFX’s latest analysis – US-China Trade War Enters New Phase amid Yuan Depreciation outlines the effect of a weaker CNH in the current trade spat.

Gold Remains Strictly Correlated to the Chinese Yuan

In times of heightened market risk, investors seek the safe-haven of gold, the Swiss Franc and the Japanese Yen, with the former the most favored. Gold remains weak however, with a weak Chinese Yuan and a strong US dollar weighing on the precious metal. The direct correlation between USDCNH and gold remains intact with the Yuan the driver of any move. Expectations of higher US interest rates continue with a third 0.25% hike this year priced in for September along with a fourth hike in December. The current price of gold may also be indicating that markets believe that the latest Washington talk of higher tariffs is more likely a negotiating tactic to bring China to the table, which could leave to a cooling of trade tensions.

Gold Price – Chinese Yuan Correlation Daily Chart (November 2017 – August 2, 2018)

US-China Trade War Rhetoric Ramps Up; Gold Price Remains Weak

Gold Downtrend in Control

The price of gold continues to be capped by a downtrend started from the recent high at the start of April. Fibonacci support at $1,215/oz. is currently holding but a break below would leave the July 10, 2017 low at $1,204.9/oz. firmly in play.

Gold Price Daily Chart (May 2017 – August 2, 2018)

US-China Trade War Rhetoric Ramps Up; Gold Price Remains Weak

Additional Trade War Primers and Walk Throughs – Recommended Reading:

The Impact of Tariffs and Trade Wars on the US Economy and the Dollar

A War to Trade More, Not Less - What’s Behind US-China Tariffs

Traders may also be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

--- Written by Nick Cawley, Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.