At the end of 2017 US President Donald Trump launched an investigation into China’s trade policies and consequently imposed tariffs on Chinese goods entering the US. Thereafter, Beijing retaliated and imposed their own tariffs on the US. At the end of last year both countries agreed to halt any new tariffs and both countries are at present continuing to negotiate.
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For clients that are trading US dollars, the trade war is a concern which has been highlighted by the International Monetary Fund (IMF), as they have stated further tariffs will have a detrimental impact on the global economy. If in the upcoming months' tensions escalate and further tariffs materialise I expect that the US dollar could come under pressure.
The Federal Reserve (Fed) earlier this year highlighted that they believe it’s unlikely they will raise interest rates twice and instead think interest rates will remain on hold at 2.5% for the remainder of 2019. In my opinion this just shows that they are concerned that a recession could materialise in the next 12 months due to the global slowdown.
To finish the week the US will release their latest Retails sales, continuous jobless claims, market manufacturing and market services numbers all at 12:30. Retail sales and Markit manufacturing numbers are set to impress however continuous jobless claims and market services are set to fall. Clients that are trading US dollars could expect a volatile afternoon for the greenback.
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