Trade war coming to a Halt?
The United States Government has agreed to postpone the 10% tariffs on Chinese goods following the claim of Beijing manipulating the yuan and labelling China as a currency manipulator. China has complained to the World Trade Organization (WTO) to help determine the legality of the United States trade policies, stating that the U.S. has not only violated China’s rights and undermined the WTO’s authority. Has this delay been a compromise made by President Trump?
Taxed imported goods included, smartphones, laptops, toys, and video games. The original statement exclaimed that the 10% tariffs were set to take effect on the 1st of September, now delayed to December the 15th. Wall Street Journal analysis estimated 2018 imported Chines goods were valued at approximately $156 billion.
What effect has this had on the safe-haven good, gold? The uncertainty surrounding the ongoing trade war has driven gold to yearly highs of $1533. Thus, the recent delay on tariffs has had detrimental effects on gold prices, sending gold plummeting to the $1507 mark.
Since then we have seen a steady recovery with gold currently trading at $1519.
The Euro only continues to drop lower and lower. When we looked at the EUR/USD pair on the 7th, it was at a 4-month low. When we revisited it just under a week ago, it had managed to hit a low not reached since April 2017. And now the Euro has dropped further still, sinking below the 1.0800 mark. It seemed to recover slightly, but has now dropped back down, leading to a 34-month low.
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The Nikkei, or Japanese Stock Market Index, is down 1.6% after a fall of 330 points, marking a fourth straight day of losses.
The most obvious factor affecting this is the continuing fears of the coronavirus, which is affected all Asian markets as the severity of the virus only worsens.
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