ICM, the leading London-based FX and CFDs provider, reported that the U.S. dollar bounce faded despite the fact that President Donald Trump imposed new 10% tariffs on $200 billion of Chinese goods.
U.S. stocks finished lower on Monday, pulled down by the escalation of the trade spat between the United States and China. President Donald Trump announced after the market close that the United States will impose 10% tariffs on $200 billion of Chinese goods. Trump threatened that he would impose additional tariffs on other $267 billion worth of goods if China retaliates. Moreover, one of the Trump administration officials expects the 10% rate to rise to 25% in the coming weeks. As per ICM trading platform, the tech sector was among the worst performers with the tech-heavy Nasdaq Composite losing 1.4% to 7895. The SPX500 fell by 0.6% to 2888, and the Dow Jones Industrial Average lost 0.4% to 26062. Major U.S. indices remain vulnerable to new headlines concerning trade war.
ICM highlighted that the dollar index which measures the greenback against a basket of major currencies lost Friday’s gains and settled at 94.50, the lowest close since late July. Market participants are waiting for the Chinese retaliatory measures that could affect investor’s risk appetite and spark the demand for safe haven. On the other hand, the greenback was under pressure due to the rising hopes of a Brexit deal. Officials reported yesterday that there are signs of progress regarding the Irish borders issue which is a key obstacle for a Brexit deal. The news supported European currencies against the United States dollar. As per ICM trading platform, the GBPUSD traded at a six-week high of $1.3165, and the EURUSD recovered to trade at a high of $1.1703 during the Asian session.
Gold prices remain caught in a tight trading range awaiting major fundamental news to breakout from the consolidation zone. As per ICM trading platform, the gold ounce settled slightly higher at $1200. The silver ounce is steady near the 14$ level, the lowest since January 2016.
Oil prices ended lower, weighed down by the trade tensions that could affect the demand for oil in the future. The International Energy Agency warned last week about the escalation of trade disputes that could lead to a global economic slowdown. As per ICM trading platform, the West Texas Intermediate crude futures settled at $68.74 per barrel, and the Brent futures finished lower at $77.94 per barrel. The American Petroleum Institute will report the weekly crude oil stock later today. Last week, reports showed that the U.S. crude inventories were at the lowest levels since 2015.