The main currency pair is trading rather slowly on Thursday; investors are keeping eyes on “trade conflicts”.
EURUSD had recovered and reached stability by Thursday, but may yet become very volatile. The current quote for the instrument is 1.1680.
Yesterday, investors’ undivided attention was once again focused on “trade wars” started by the USA. After introducing increased import duties on Chinese goods in the amount of 32B USD that took effect on July 6th, the USA announced the next stage of the program, which will cover the total of 200B USD. In case it really happens, more than 45% of all Chinese import to the USA will be slapped with the new duties. Needless to say that it’s way too much for other global economies to escape the influence of such attack.
China hasn’t responded to the American aggression yet. Everything that the Chinese government was talking about remained on the paper so far. However, it’s quite clear that China might do the same to the USA at any moment.
This is why investors’ demand for “safe haven” assets is increasing.
The statistics published by the USA yesterday showed that the PPI added just 0.3% m/m in June after expanding by 0.5% m/m the month before. However, the reading was still better than expected (+0.2% m/m). On YoY, the indicator increased by 3.4%, which is the strongest number over the last 8 years. These readings also provided support to the American currency.
Later in the afternoon, the USA will report on several other indicators, including the Consumer Price Index in June. The expected reading is +0.2% m/m, the same as in May, but if the statistics turn out to be better, the USD may go up.
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
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