ICM, the leading London-based FX and CFDs provider, reported that the financial markets remain under pressure as we approach the US tariff deadline on $34 billion of Chinese imports. Moreover, the greenback weakened against major rivals to erase Monday’s gains.
The US stocks finished lower ahead of July 4th holiday. The Dow Jones Industrial Average retreated from a high of 24466 to close at 24185, as per ICM trading platform. The tech sector suffered the most from the news that a Chinese court blocked the sale of Micron Technology chips in the country. MU dropped more than five percent and settled near a two-month low. On the other hand, China urged the EU to launch a joint action, against Trump’s trade policies at the World Trade Organization summit later this month. A trade war between the United States and its rivals will negatively affect the growth of the global economy. Major central banks addressed the risks erupting from the trade spat and its effects on their monetary policy. Imposing higher tariffs will hurt the profitability of the companies. As a result, firms will be forced to cut costs, avoid expansion, and create fewer jobs.
ICM highlighted that the dollar index erased Monday’s gains and is now down on the week ahead of key data. The dollar index fell from a high of 94.98 and settled at 94.59. The weakness continued during the Asian session where DXY traded at a low of 94.40. On the other hand, USDJPY concluded a five-day winning streak and reversed from a six-week high to trade at a low of 110.28, as per ICM trading platform. The United States will close for the Independence Day, and the June FOMC meeting minutes will be released tomorrow.
Gold prices bounced-off a seven-month low of $1238 as low prices attracted buyers. The gold ounce was three- dollars away from posting a one-year low. However, the bullion found support at a trend-line combining the lows of 2015 and 2016. Also, the silver ounce regained strength and rose to a high of $16.13, as per ICM cTrader Platform.
Oil prices ended slightly higher supported by the supply disruption. The West Texas Intermediate rose to a multi-year high of $75.24 but settled lower at $74.19. Brent oil closed at $77.80 after trading at a high of $78.51. On the other hand, the American Petroleum Institute reported that the weekly crude oil stock fell by 4.5 million barrels. Oil prices could face pressure as top oil producers are racing to increase production to gain a bigger market share, while the global economy is facing a trade-war threat.