Yen spikes to near 3-year high on trade war escalation
The broad-based flight to safety brought on by yet another round of tit-for-tat tariff hikes saw the yen surging to its highest level versus the US dollar since November 2016. The FX pair subsequently rebounded as liquidity improved during the Asian morning session and the pair is now at 105.54, a 1% rebound from the 104.45 low.
Most equity indices were also on the defensive, extending the weak close on Wall Street during the session. US indices were down between 0.32% and 0.42%, extending the recent decline to a third consecutive day. China shares were remarkably steady, with the China50 index dropping 0.02% while Hong Kong shares skidded 0.51% after more weekend protests.
USD/JPY Daily Chart
Source: OANDA fxTrade
China still willing to sit at the negotiating table
Chinese Press were reporting this morning that China’s Vice Premier Liu He said that China is still willing to resolve the current trade dispute with the US through “calm negotiations”. He added that China opposes the escalation but noted that China still has sufficient tools to ensure growth. It would appear that China views the latest deterioration as more of a desperation play by Trump and they are willing to “stick it out” for a solution that is fairer for both sides.Read More
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