The dollar has accelerated the decline on the statement of China on the retaliatory tariffs

The US dollar accelerated its decline across the market after China announced that it would take back duty duties on American goods.

Under Chinese tariffs will fall $ 60 billion. Tariffs will be increased for 2493 products to 25%. Tariffs will take effect from June 1. Also, the Chinese government added that it could refuse agricultural goods and energy from the United States, reduce orders for Boeing aircraft and limit the provision of services. The possibility of reducing US treasury bills is also being discussed, which in fact will be the last point in relations between the US and China.

Such statements by China put the United States in an uncomfortable position, virtually completely severing all key trade relations between the countries. China’s dumping of US treasury bills is the fastest way to derail the value of the dollar, against which trading risks look very moderate. In so doing, the Chinese government took on Trump’s negotiation style, which also heightens market fears in anticipation of a tough trade war.

The US dollar index on such a statement accelerated the decline and updated a month’s low at the level of 97.10. Also the US government bonds were under the  pressure. The key support for the US dollar index is 97.00 and 96.80.

Fig. The US dollar index chart. The current price is 97.10 (10-year government bonds  yield is the blue line)

See also: “The Economy of Switzerland. How much is the lowest discount rate in the world? ”

Hanzenko Anton

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