Forex Marketz Daily Forex News – Fully Markets Update
The U.S. dollar fell from seven week highs against the Japanese yen and the Australian dollar was pummeled after the United States announced new plans to hit a further $200 billion of imports from China with new tariffs. This is an escalation of the trade war between the two countries.
These tariffs were reported during the early Asian trade hours. This is when the Forex market’s liquidity is at its lowest daily level. This causes a sudden reaction to selloff at risk asset classes against less vulnerable Forex classes.
The USD/JPY Forex market fell to 110.85 yen. It was at 111.25 yen during the North American hours. The dollar had hit a seven week high earlier on Tuesday.
The Japanese currency is perceived as a regional safe haven asset during times of political and financial market turmoil. Japan is the world’s largest credit nation. This means that any repatriation of capital by Japanese investors will exceed foreign investors.
The AUD/USD market took a hit. The Australian dollar fell to $0.7424. That is down from the weekly high at $0.7480. This was also a better than three week high for the Australian dollar.
Yen Traders have a Knee Jerk Reaction to New US Tariffs
Overnight, as the Asian trade hours were beginning, U.S. Trade Representative Robert Lighthizer said that the United States would impose fresh tariffs, of ten percent, on Chinese imports worth $200 billion. The U.S. just placed tariffs on $34 billion Chinese imports.
U.S. officials set a two month deadline for them to go into effect. This will allow for public comments on the proposed tariffs.
The tariffs come after President Donald Trump said that the United States would look to tax a total of $500 billion worth of Chinese products. This is about the total value of Chinese imports to the U.S. as of last year.
