- The Aud/Usd faced challenges as the US dollar can be seen for the commercial agreement between the US and the EU.
- Commercial conversations between the US and China will resume on Tuesday.
- The RBA is expected to closely monitor the June workforce data and the inflation figures of the second quarter.
The AUD/USD advances after registering losses in the three previous sessions, negotiating around 0.6520 during the Asian hours on Tuesday. The PAR faced challenges as the US dollar (USD) rose by the commercial agreement between the United States (USA) and the European Union (EU).
The US and the EU reached a commercial framework agreement on Sunday that establishes 15% tariffs on most European goods, which will enter into force on August 1. This agreement has ended a stagnation of months, according to Bloomberg.
Operators keep their eyes on additional developments in commercial conversations between the US and China. The discussions will resume on Tuesday after senior economic officials of both nations held more than five hours of negotiations in Stockholm on Monday. The purpose of this meeting is to solve ongoing disputes and extend its commercial truce for another three months.
The US Treasury Secretary, Scott Besent, met with the Vice Prime Minister of China, He Lifeng, in Rosenbad’s government offices in Sweden. The meeting occurs before a period of August 12 to end a long -term tariff agreement with the Trump administration, based on preliminary agreements reached in May and June that helped reduce tensions.
The Federal Reserve (FED) is expected to maintain the stable reference interest rate between 4.25% and 4.50% at its July meeting. The FOMC press conference will be observed in search of signs that feat cuts can begin in September.
The Bank of the Australian Reserve (RBA) is expected to closely observe the June workforce data and the inflation figures of the second quarter before deciding on a possible rate cut. Both monthly and quarterly reports of the CPI are scheduled for publication later this week.
Commercial War between the US and China – Frequently Questions
In general terms, “Trade War” is a commercial war, an economic conflict between two or more countries due to the extreme protectionism of one of the parties. It implies the creation of commercial barriers, such as tariffs, which are in counterbarreras, increasing import costs and, therefore, the cost of life.
An economic conflict between the United States (USA) and China began in early 2018, when President Donald Trump established commercial barriers against China, claiming unfair commercial practices and theft of intellectual property by the Asian giant. China took retaliation measures, imposing tariffs on multiple American products, such as cars and soybeans. The tensions climbed until the two countries signed the Phase one trade agreement between the US and China in January 2020. The agreement required structural reforms and other changes in China’s economic and commercial regime and intended to restore stability and confidence between the two nations. Coronavirus pandemia diverted the attention of the conflict. However, it is worth mentioning that President Joe Biden, who took office after Trump, kept the tariffs and even added some additional encumbrances.
Donald Trump’s return to the White House as the 47th US president has unleashed a new wave of tensions between the two countries. During the 2024 election campaign, Trump promised to impose 60% tariff particularly in investment, and directly feeding the inflation of the consumer price index.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
