Collinson FX Commentary: Mar 26 - USD slides post tariffs

by Collinson FX 26 Mar 2018 05:05 PDT 27 March 2018

Day 2, Bay of Islands Sailing Week, January 25, 2018 © Richard Gladwell

Collinson FX: Mar 26: Trump opens trade war

Equity markets continued to unwind under the threat of global trade wars. The Trump administration has announced the imposition of tariffs of up to $60 Billion on Chinese trade. This is the opening salvo on negotiations designed to curtail Chinese theft of 'intellectual property' and address the massive trade imbalance. China has responded with retaliatory tariffs but they can only lose this war.

They have an enormous trade surplus with the USA and 'free trade' has allowed this to flourish. Chinese markets have been protected by their own tariffs/trade restrictions, impeding trade partners, while taking advantage on free markets in the US. Command economies have worked well, as Asian Tigers have demonstrated, but challenges are here. Free Trade is transitioning to 'fair trade' and reciprocity!

The Dollar has suffered, with the EUR jumping to 1.2350, while the Yen has hit 104.50! This is a temporary reaction to 'trade wars' and the Feds activities should ensure the continued performance of a strong Dollar. The Central Banks that have been mired in the previous monetary cycle, should perform accordingly. The ECB, RBA, RBNZ and BoJ continue with QE, supporting vulnerable economies, thereby undermining their currencies. The NZD will open the week above 0.7200, while the AUD remains vulnerable, drifting below 0.7700.

Easter arrives this coming week so a shortened trading week should provide plenty of action.

Disclaimer: The details expressed in this website and accompanying documents or transmissions are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. Collinson Forex Ltd accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the information contained or related to this site

For more on Collinson FX the latest update click here now

Countries: | NZ: 0800 338 838 | AU: 1800 143 415 | NY: 1888 6257 833 | UK: 0800 0285 834 |

Related Articles
Collinson FX November 11: Feel good US economy
US Federal Chairman says he is ,‘feeling good' about the US economy Markets continued to rally, following the huge wave of positive sentiment from the election of President Trump. The Fed unanimously voted to cut a further 25 basis points. US Federal Reserve Chairman, that he was ‘feeling good' about the US economy. Posted on 11 Nov Collinson FX June 7: ECB cuts rates
ECB (European Central Bank) cuts rates for the first time in five years, more cuts expected The ECB (European Central Bank) cuts rates for the first time in five years, as expected, offering relief to borrowers. Markets anticipate that the ECB will cut again, at least once, this year. Posted on 10 Jun Collinson FX: OCR hold lifts NZD
RBNZ was hawkish, citing inflationary pressures, in their decision not to change the Cash Rate RBNZ was hawkish, citing inflationary pressures, in their latest decision to leave interest rates at these elevated levels, until at least next year. That had the same impact on the currency, with the NZD rallying strongly following the RBNZ rate decision Posted on 22 May Collinson FX: Jan 20: No change with PM's exit
The NZ ‘PM of Aotearoa' resigned yesterday, which had little impact on the currency. The NZ ‘PM of Aotearoa' resigned yesterday, which had little impact on the currency, as this will have little impact on the NZ economy. Posted on 19 Jan 2023 Collinson FX: Dec 5 - Risk appetite rallies
US Federal Reserve Chairman confirms the rate of future interest rate rises may slow US Federal Reserve Chairman confirms the rate of future interest rate rises may slow, as early as December. Posted on 5 Dec 2022