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.

Free Trading Guides
EUR/USD
Bearish
GBP/USD
Bearish
USD/JPY
Mixed
Gold
Mixed
Oil - US Crude
Mixed
Bitcoin
Mixed
More View more
Notice

DailyFX PLUS Content Now Available Freely to all DailyFX Users

Real Time News
  • Trader tip: Not making a decision means avoiding #FOMOintrading. @IlyaSpivak https://t.co/PGD0n13D9p
  • Easing trade tensions provide tailwinds for equity markets. Get your update form @JMcQueenFX here: https://t.co/79q553DJNa
  • Here's a link to my technical outlook for the Dollar this week: 'US Dollar Facing Measured Breakout and In Its Long Grind Higher' https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2019/09/22/US-Dollar-Facing-Measured-Breakout-and-In-Its-Long-Grind-Higher.html?utm_source=Twitter&utm_medium=Kicklighter&utm_campaign=twr
  • RT @business: A senior official from the Bank for International Settlements has added his voice to those calling on governments to back up…
  • RT @JimPethokoukis: “The recent rise in trade policy uncertainty is extraordinary by several metrics ... much evidence points to negative e…
  • Traders should know how to confidently approach, enter and exit both Bull or Bear markets. Need some insight into it? Get it from @nickcawley1 here: https://t.co/GhvvFrB3gz https://t.co/JxyCkhOHSS
  • What is the biggest obstacle a trader needs to overcome to be successful? Find out from @JWagnerFXTrader here: https://t.co/7nWHSApUzS #FOMOintrading https://t.co/vXfEWo58RY
  • OECD warns of recession, central banks unleash, and the $USD builds breakout pressure. Get your update from @JohnKicklighter here: https://t.co/UKg6wfl8PB
  • What are the 6 common mistakes traders make? Is #FOMO a common mistake? Find out from @PaulRobinsonFX here:https://t.co/B7hOpGEHMp #FOMOintrading https://t.co/WOYk6lOJur
  • All currencies are not the same; emerging market #FX trades differently than developed market FX. Find out how these currencies differ, from @CVecchioFX here: https://t.co/BH8oal18sz https://t.co/IvomjZw0Bc
AUD, NZD, CAD Suffer After Trump Tweets New Tariff Threats

AUD, NZD, CAD Suffer After Trump Tweets New Tariff Threats

2019-05-05 21:37:00
Dimitri Zabelin, Junior Currency Analyst
Share:

TALKING POINTS – TRADE WAR, US-CHINA TRADE RELATIONS, GLOBAL GROWTH

  • Risky assets suffer from Trump tariff threat tweets
  • JPY, USD, CHF rise amid demand for anti-risk assets
  • How will global financial markets respond to the news?

See our free guide to learn how to use economic news in your trading strategy!

APAC markets had a sour taste in their mouth early into Monday’s trading session. US President Donald Trump tweeted that on Friday, Washington will increase tariffs on $200 billion in Chinese imports from 10 to p25 percent. He also threatened to extend the 25% tariff to a further $325 billion worth of goods from the world’s second-largest economy.

This could lead Beijing to ramp up their own economic arsenal and prepare for retaliation. In his tweet, Trump expressed dissatisfaction with the current state of negotiations, hinting that hawks within administration are growing impatient with the slow pace of progress. The disruption comes amid comments that talks were going “well”, with expectations that a deal was to be reached by the end of the month.

It also creates an awkward backdrop for US-China trade negotiations in light of Vice Premier Liu He’s visit to Washington on Wednesday to conclude what was to be expected to be the final round of trade talks.

This comes as major equity indices have reached new highs or at the very least have come close to their previous 2018 records. A collapse in trade negotiations – a fundamental theme that has dragged markets through the mud – could spark significant market volatility. Global PMI’s and other major leading indicators have shown that the outlook for global growth is much weaker than previously expected, with the IMF and WTO citing ongoing trade wars as a major cause for deceleration.

While risky assets have suffered amid this news, anti-risk alternatives like the Japanese Yen, US Dollar and Swiss Franc have risen. If relations continue to deteriorate, we may see a magnification of these assets’ reactions, especially if prevailing global economic conditions do not look healthy.

DOLLAR INDEX, AUD/USD, NZD/USD, GOLD, S&P500 FUTURES, YEN INDEX

Chart Showing AUD/USD, USD/NZD, S&P 500 Futures

FX TRADING RESOURCES

--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

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

DISCLOSURES

News & Analysis at your fingertips.