The US Dollar (USD) plummeted during European trading hours on Friday, on news indicating China announced additional tariffs on the United States (US). On Thursday, the White House confirmed tariffs on China of 145%, higher than the 125% previously estimated.
A mad week for markets is ending with heavy losses for the dollar. The FX scorecard is speaking volumes; in G10, only the illiquid Norwegian krone is flat against the dollar since last Friday.
The current US tariff rate will drag China’s GDP growth lower by c.1.8ppt. Any further increases in tariffs are likely to have little impact on China’s growth. Another CNY 1.5-2.0tn of fiscal support is needed, supported by moderately loose monetary policy, Standard Chartered's economists report.
After closing the third consecutive day in positive territory on Wednesday, GBP/USD preserves its bullish momentum and rises about 1% on the day at around 1.3100.
A break above 1.1275 could trigger further rally; the levels to monitor are 1.1350 and 1.1400. In the longer run, Euro (EUR) is likely to rally further; the levels to monitor are 1.1400 and 1.1450, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
USD/JPY extends its losing momentum into the fourth consecutive day in European trading on Friday, having recorded its lowest level in seven months just above 142.00.
The Euro (USD) remains a key recipient of US Dollar (USD) outflows, and is currently trading around 1.125 after major overnight swings that saw it trade as high as 1.138.
After losing nearly 4% on the day on Thursday, USD/CHF continues to push lower on Friday and trades at its weakest level since September 2011 at around 0.8150.
European Central Bank (ECB) policymaker and Bank of France head Francois Villeroy de Galhau said on Friday that US President Donald “Trump's economic and financial agenda is the wrong path.”
Platinum Group Metals (PGMs) trade with a positive tone at the beginning of Friday, according to FXStreet data. Palladium (XPD) changes hands at $923.74 a troy ounce, with the XPD/USD pair advancing from its previous close at $918.60.
The EUR/USD pair keeps pushing higher, hitting the highest level in three years above 1.1450 in European trading on Friday. The latest uptick in the pair is mainly linked to a fresh leg lower in the US Dollar (USD) after China retaliated with a tariff hike to 125% from 84% on US goods.
Gold price (XAU/USD) gathered bullish momentum and reached a new record-peak at $3,237 in European trading on Friday, boosted by the intensifying US-China trade war, before retreating to the $3,220 region.
Following his meeting with Spanish Prime Minister Pedro Sanchez on Friday, Chinese President Xi Jinping said that “there is no winner in a tariff war.”
The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against a basket of six major currencies, continues its decline for the second consecutive session, hovering around 100.40 during Friday’s Asian trading hours.
The UK economy expanded in February, with the Gross Domestic Product (GDP) rebounding 0.5% after recording no growth in January, the latest data published by the Office for National Statistics (ONS) showed on Friday. The market forecast was for a 0.1% growth in the reported period.
The USD/CAD pair remains weak near 1.3965 during the early European session on Friday. The Greenback edges lower against the Canadian Dollar (CAD) amid persistent concerns over the global and US economies.
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