The Cable falls amid “hard” Brexit comments, while US-China trade rhetoric fuels the Greenback’s advance.August 7, 2018
The U.S. Dollar index rose against the basket of six major currencies on Monday, to trade at 95.37, after the British Pound dropped to an 11-month low against its American counterpart overnight on worries that a ‘hard’ Brexit approach is on the table. Meanwhile escalating U.S.-China trade tensions also helped lift the greenback.
In trade, China is preparing to retaliate with tariffs on roughly 60-billion-dollars worth of U.S. goods amid escalating trade war.
There import taxes will apply to four lists of good, with a majority of goods are agricultural related, while other on taxes are applied to various metals and chemicals.
Trade war rhetoric boosted the dollar, with a few analysts view trade tensions as beneficial for the U.S. dollar as the economy is better placed to handle protectionism than emerging markets, and as tariffs may narrow the U.S. trade deficit.
In Europe, Fears that Italy will increase spending and defy European Union budget rules. Additionally, the declines in German industrial orders in June also weighed on the Euro. The EURUSD fell by 0.12 percent to trade at 1.15531 at the close.
In the United Kingdom, the Cable dropped more than 0.45 percent to trade at 1.29435 at the close after Comments from officials regarding a no-deal Brexit sparked fears that the Kingdom would crash out of the EU next year without securing a trade agreement.
Regarding safe-havens, the Greenback outmuscled its Japanese counterpart on Monday to end the session up by 0.11 percent t settle at 111.40 USDJPY. Meanwhile, the Dollar also advanced versus the Swiss franc with the USDCHF surged by 0.31 percent to end the session at 0.9965.
While value keeping precious metal, Gold, continued to trend lower against the Dollar on Monday to trade at 1207.35 XAUUSD.
In commodity stocks, the Canadian loonie lost to the greenback despite an appreciation in oil price, Canada’s most significant export; The USDCAD added 0.08 percent to trade at 1.30023 at the close, U.S Crude oil ended the session higher at $69.21 a barrel.
Furthermore, both Aussie and Kiwi lost ground to their U.S counterpart to close the session lower at 0.73861 AUDUSD and 0.67317 NZDUSD.
Regarding Cryptos, the Bitcoin and Ethereum declined versus the Greenback to end the session at 6893.21 BTCUSD and 400.91 ETHUSD, while LTCUSD also closed lower at 71.90.