USD: Tariff threats disturbed the markets – Scotiabank

More tariff threats of President Trump are having a predictable impact on the markets. During the weekend, the president threatened with 30% tariffs to the EU and Mexico from August 1. The actions are weaker and the bonds are mixed, but the treasure bonds are low performance. The US dollar (USD), after being modestly strengthened in the Asian session, is mixed in the session (both the DXY and the BBDXY are weaker). The gold is firmer, the FX chief strategists of Scotiabank, Shaun Osborne and Eric Theoret point out.

The USD falls next to the actions and bonds of the Treasury

“The relatively moderate market movement in the market in response to this type of commercial pressure suggests that investors hope that a less severe result will eventually arise, but time is running out and tariffs will end up being significantly higher than they were. The slowest growth, the slowest global trade and the highest prices can still be. September, with around 16 basic points now considered.

“In fact, there are no credible indications that Powell is renouncing or even thinking about it. If the president really wants lower interest rates, this seems to be the wrong way to achieve it. The US data calendar intensifies materially this week, simply not today. The IPC (Tuesday), the IPP and the retail sales data will be published in the next few days, however, they can reflect the tension between Inflationary (persistent) pressures and consumer activity (weaker) that highlight the challenge for those responsible for the Fed in the current environment.

“The most early published data today reflected stronger profits than expected in China June exports (+5.8% year -on -year). The DXY maintains a firm tone in the short term, but a net loss in the day for the index so far can point out that a better interest in both directions is emerging to challenge the July rebound. The support is 97.60. The resistance is 98.40.”