5.04 - tension on trade war cools down for the day
Trade war between the two biggest economies in the world is the topic every trader is talking about. But today with tensions going down bit by bit the markets are focused on recoveries from what was the worst quarter in years for stocks and indices.
After neither the US government nor Mexican officials have backed up Trump’s decision to build a wall that will separate US from Mexico, American President is not going to give up on the idea. Now, amidst talks of NAFTA he is going to send American troops to the border.
Although now Mexico is the kay partner of the USA, there is seemingly nothing that can stop Trump from separating the two neighboring countries. With NAFTA talks not ending for months and Trump wanting American cars to be represented by almost 70 percent in Mexico and Canada the move of sending troops to the border seems very wrong.
From Mexican side the comments followed. Officials from USA’s southern neighbor said that is the troops deployment to the border will means the militarization of the zone, the relations between the two countries will be gravely damaged.
Initial price for the wall was stated to be $25 billion. Now, until Trumps gets approval and funds from either side, the troops will be standing in between the two countries.
As the tension between the US and China are shaking, it is easy to think that the currency markets would be unstable too. Trading relations between the two biggest and strongest economies in the world are jumping up and down with the two threatening each other with new tariffs and staying quiet the next day, like today. But, with all that currency markets are relatively still.
The reason for such calm behavior is that the traders can’t choose the currency to bet on in case there is a crisis in the trading world. Although market spectators seem to be sure that negative outcome is on the way, it is still fairly hard to understand which currencies will be left untouched and which will crash or go up.
With the tension at such high level as American-Chinese trading relationship the whole world will surely be the subject to crisis but for now the Forex market seems to hold on to the bets because of the uncertainty. The greenback has even gained points against 6 its counter parts in the basket. But will the growth and stability be sustainable and for how long?
Asian markets are showing good recovery today with dollar going up and steady as well.
Stoxx Europe 600 Index went up 1.6 percent and the highest point in almost 8 weeks will possibly be hit by the Index.
S&P 500 Futures are also showing highest-in-weeks-points with 0.6 percent advance.
MSCI Emerging Market went up 0.7 percent.
Dow Jones went up 230 points - $24.264,30 per stocks.
Dollar went 0.2 percent up against the basket of six major currencies and euro went by as much down - $1.2259.
WTI oil added 0.1 percent - $63.45 per barrel.
Gold shed 0.5 percent of the price - $1.326,15 per ounce.
- by Anna K.