Dollar weakens again on tariff details releases

Markets situation:

• Wall Street futures point to losses of over 1% for major indices
• Hong Kong’s Hang Seng and Seoul’s Kospi stand out with notable falls
• Frankfurt’s export-heavy Xetra Dax hit as trade dispute unnerves investors
• China applies 25% tariff to 106 US products
• Trump’s new tariffs applied to 1,333 Chinese products
• Dollar slips having held its ground before Beijing’s response
• US corn and soyabean futures down almost 3% after inclusion on China’s list

It has been a hard day’s night for Dollar, recalling famous Beatles song. This morning, the US dollar remains weak as the Trump administration revealed trade tariffs that are wider ranging than previously thought. Market reaction has been relatively muted, but the underlying trend remains pressure on the dollar. Basically, China hit back at the Trump administration’s plan to slap tariffs on $50 billion in Chinese goods, retaliating with a list of similar duties on key U.S. imports including soybeans, planes, cars, whiskey and chemicals.

Tough hit for republican administration which is already under pressure from tech stock market woes. The dollar slumped against the Japanese yen, as safe haven demand was boosted by these escalating trade tensions. USD/JPY was down nearly 0.4% to 106.15, after sliding to an overnight low of 105.69.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dipped 0.2% to 89.69.

In the bond market, the U.S. 10-year Treasury yield inched down to 2.770%.

Looking ahead, the highlight of Wednesday’s economic calendar will be the ADP jobs report at 8:15AM ET (1215GMT). Expectations are 208,000 private jobs were created in March.

Today`s market movers are: UK construction PMI at 09.30, European CPI flash estimates at 10.00, US ADP non-manufacturing PMI is at 15.00, US crude oil inventories are at 15.30, FOMC member Mester speaks at 16.00. All times are London times, of course.

Sources:

https://www.ft.com/content/fa91a692-3796-11e8-8eee-e06bde01c544

https://www.investing.com/news/economy-news/top-5-things-to-know-in-the-market-on-wednesday-1376930

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