Dollar falls broadly on renewed global trade war concerns

Market Review - 23/06/2018  02:58GMT  

Dollar falls broadly on renewed global trade war concerns

The greenback ended broadly lower against majority of its peers on Friday as global trade tensions intensified after countries retaliated with increased tariffs against United States. Sterling retreated from 1-week high as investors stayed cautious ahead of Brexit talks in EU summit which will be held on June 28-29.  
  
Reuters reported Germany hopes the EU's reaction to U.S. trade tariffs will bring sense to all those involved and that a negotiated solution will be sought, a spokeswoman for the economy ministry said on Friday.   
  
Reuters reported earlier in the week, the European Commission said it would start charging import duties of 25 percent on a range of U.S. products from Friday after Washington imposed tariffs on EU steel and aluminium at the start of June.  
  
Versus the Japanese yen, dollar traded broadly sideways in Asia and dipped to 109.87 in European morning before rebounding to 110.22 on cross-selling in yen. However, price met renewed selling and fell to 109.80 in New York morning on safe-haven buying of jpy after Trump's tweet as well as falling U.S. Treasury yields. Price last traded at 109.97 near the close.  
  
Although the single currency traded with a firm bias in Asia and rose steadily to 1-week high at 1.1675 in European morning after Italian politician reassured that their nation would not leave the European Union. However, price met renewed selling and fell in tandem with sterling to 1.1633, then ratcheted lower to 1.1618 in New York after U.S. President Donald Trump threatened to impose 20% tariffs on all European Union cars.  
  
Reuters news, Italy League Party lawmaker says monetary sovereignty would solve many of country's problems but euro exit is not part of govt plan.  
  
Reuters reported U.S. President Donald Trump threatened to impose a 20 percent tariff on all European Union-assembled cars coming into the United States, a month after the administration launched an investigation into whether auto imports pose a national security threat.   
  
The British pound went through a roller-coaster ride. Although cable traded with a firm undertone in Asia and climbed steadily in tandem with euro to 1-week high at 1.3315 in European morning, price met renewed selling and fell to +1.3249+ in New York morning on profit-taking as investors remained cautious ahead of next week's Brexit talks during EU summit.  
  
In other news, Reuters reported Germany's Merkel speaking in Beirut says I am working for the government to implement plans set out in coalition agreement.  
  
On the data front, the preliminary reading of the EU Markit services purchasing managers' index came in 55.0 this month from 53.8 in May. Economists had forecast a reading of 53.7. The manufacturing PMI fell to 55.0 from 55.5 a month earlier. The reading was in line with forecasts.  
  
Data to be released this week :    
Japan coincident indicator, leading economic index, Germany Ifo business climate, Ifo current conditions, Ifo expectations, and U.S. building permits, national activity index, new home sales, Dallas Fed manufacturing business index on Monday  
  
U.K. BBA mortgage approvals, CBI distributive, and U.S. redbook, CS home price, consumer confidence, Richmond Fed manufacturing index on Tuesday  
  
New Zealand imports, exports, trade balance, France consumer confidence, Italy business confidence, consumer confidence, Swiss ZEW investor sentiment, Italy trade balance, producer prices, and U.S. MBA mortgage application, durable goods, goods trade balance, wholesale inventories, pending home sales on Wednesday  
  
Japan retail sales, Germany GfK consumer sentiment, import prices, CPI, HICP, Italy CPI, CPI (EU norm), EU business climate, economic sentiment, industrial sentiment, services sentiment, consumer confidence, and U.S. GDP, PCE prices, initial jobless claims, KC Fed manufacturing index on Thursday  
  
Australia HIA new home sales, U.K. GfK consumer confidence, GDP, current account, Japan Tokyo CPI, unemployment rate, industrial production, consumer confidence, construction orders, housing starts, Germany retail sales, unemployment change, unemployment rate, France consumer spending, CPI (EU norm), producer prices, Swiss KOF indicator, EU HICP, Canada GDP, producer prices, and U.S. personal income, personal spending, PCE price index, Chicago PMI, University of Michigan sentiment on Friday