Asian stocks are in steady decline and concern about the new tariffs Trump may place on Chinese products on Friday
Asian equities retreated on increased anxieties about the Sino-US trade tensions ahead of Washington’s end of week deadline to impose tariffs on Chinese imports, while the Yuan recovered after China’s central bank acted to calm nervous investors.
On Tuesday, wall street equities declined giving up early gains in a truncated session ahead of independence day holiday on Wednesday as technology shares were pressured a day after a solid start for the quarter on Monday.
The majority of market participants feared that Washington will go ahead with its plan to increase a 25% tariff on 818 product categories from China including cars on Friday, which Beijing has vowed to match with tariffs on U.S. products. They are worried that such a move could ignite a full-scale international trade war and harm the global economy specifically as the Trump administration has threatened tariffs on imports from many other major economies.
Oil prices were supported as larger-than-expected fall in U.S. stockpiles data from the American Petroleum Institute confounded worries about a supply shortage.
As for Asian equities, the Nikkei 225 was down more than 0.35% and losses were the most pronounced in the information and technology sector. Chinese shares resumed falling as well, keep in mind that another down week for the Shanghai Composite would mean its longest losing streak since 2011. Similarly, the ASX 200 and KOSPI fell about 0.45% and 0.17% respectively.
Looking ahead, investors would keep an eye on the UK’s Markit services PMI for June, set to release in a while.
EURUSD: No change in EUR/USD’s outlook as consolidation from 1.1505 continues.
GBPUSD: GBP/USD’s consolidation from 1.3050 is still in progress and intraday bias remains neutral.
USDCAD: USD/CAD’s fall from 1.3385 resumed after brief recovery and breaks 1.3130.
USDCHF: USD/CHF is still bounded in range of 0.9855-9991 and intraday bias remains neutral.
USDJPY: Break of 110.55 minor support argues that rebound from 108.10 might be finished at 111.15 already.
USDZAR: The rand (USD/ZAR) firmed in early trade on Tuesday morning against the dollar, strengthening 0.5% to trade at R13.75/$ at 09:54.
The dollar index, which tracks the dollar's relative strength against a basket of currencies of its major trading partners, was marginally weaker on Tuesday, down 0.1% at 94.78 at 09:34.
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