ICM, the leading London-based FX and CFDs provider, reported that the financial markets were under pressure earlier today as the US announced additional tariffs on more Chinese imports which ramps up the trade war between the two biggest economies.
Major US indices fell as the US administration announced that $200 billion of Chinese goods are going to be affected with 10% tariffs. China’s ministry of commerce said that the US actions are shocking and totally unacceptable, and China will retaliate using its own countermeasures. As a result, global indices became under pressure with Chinese stocks suffering the most. US indices futures opened on a negative gap and continued lower. As per ICM trading platform, the Dow Jones traded at a low of 24611 whereas the SPX500 fell from a five-month high of 2797.50 to trade at a low of 2766. President Trump and president Xi should meet to reach a trade deal and put an end to this war so the global economy can avoid a new recession. If else, the financial markets will remain under pressure.
ICM highlighted that the Japanese Yen strengthened against the United States Dollar as the sell-off in the equities increased the demand for the safe haven currency. As per ICM trading platform, USDJPY retreated from 111.35, its highest level since May 21st to trade at a low of 110.76. On the other hand, the dollar index which measures the strength of the greenback against a basket of major currencies is almost flat on the day near 94.20-30 as the index retreated from a high of 94.48 yesterday.
The Canadian dollar weakened against the United States Dollar during the Asian session as investors await the Bank of Canada interest rate decision. The bank of Canada kept interest rates unchanged for the past four meetings. The market is pricing in a high chance of a rate hike today. In the case of a rate hike, the focus will shift to the interest rate path of the bank. USDCAD found support on Monday at 1.3066, near the 38.2 Fibonacci retracement level of the move from 1.2523 to 1.3382.
Gold prices dropped yesterday to trade at a one-week low of $1247, but the bullion covered some of its losses as the dollar weakened towards the end of the day. As per ICM trading platform, the gold ounce closed at $1255. However, the precious metal traded lower today despite the escalation of the trade war between the US and China. On the other hand, the silver ounce posted a one-week low of 15.86 during the Asian session.
Oil prices fell earlier today as Trump threatened China with new tariffs. The trade war that is occurring between China and the United States is expected to weigh heavily on the global economy which could affect the demand for oil. The West Texas Intermediate traded at a low of $73.23, and the Brent oil is trading below $77.50. The American Petroleum Institute reported yesterday that the week crude oil stock fell by 6.796 million barrels. The Energy Information Administration will publish the official numbers today.