China is suffering due to the heavy tariffs that have been imposed on them by the Trump administration.
|Currency Pair||% Change (Month)||Difference on £200,000|
China’s growth has now slowed to 6.2% for the second quarter, the lowest on record. Chinese exports have dropped off due to the sharp rise in US tariffs on Chinese goods in May.
Although there was a tentative truce put in place between the two super powers in the build up to the recent G20, the trade war could still be some way from a resolution. There have been previous situations where it looked as though a deal between the two countries could be completed, only again for tariffs to come into play.
China’s slow down is a concern for the global economy, but it is benefitting the US dollar. Investors are choosing to put their money into safe haven currencies such as the US dollar due to global economic uncertainty.
Taking this situation into account and the uncertainty surrounding the UK politics and Brexit, the dollar could be set for further movement. GBP/USD hit a 27 month low during yesterday’s trading.
It can be difficult to find justification for a significant sterling rally against any of the major currencies, but in particular against the US dollar. You may wish to get in touch with your broker here to discuss some of the options available to you if you are purchasing the US dollar.
Today we will see the release of the Federal Reserve’s beige book. Interviews are given by business contacts, market experts, economists and other sources by each of the twelve Federal Reserve Districts. It can give a broad view as to the state of the US economy. If the report gives a positive view of the US economy, we could see US dollar strength.
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