US Could impulse a new threat of auto tariffs on Japan
A new threat of auto tariffs is back on the United States agenda but this time is for Japan could be Trump’s new “number one target.” Recently Trump said to Wall Street Journal, that they have good relations with the Japanese Administration but also added: “Of course that will end as soon as I tell them how much they have to pay.”
Derek Scissors an Asia economist at the American Enterprise Institute said “The president likes to pick trade fights,” and he added that, if a new NAFTA deal is signed with Canada and Mexico, then those countries would be not included in the ongoing American auto investigation. If we consider that then we can see that the European Union has already won an exemption on those tariffs and that would make Japan a key U.S. ally in Asia “the number one target. “He also said on CNBC’s “The Rundown.” “There’s a U.S. investigation into auto imports on the grounds of national security, which is a little strange. But, if you take Mexico, Canada and the EU out of it, Japan is the obvious target of that investigation into autos,”
Today Forex market was driven by a new broad-based risk-aversion. That was sparked by the last night comments from the US President Trump that he suggest Japan is in the next target amidst ongoing US-Sino trade row. US dollar, Yen and gold the Safe-havens assets were boosted but at the expense of the higher-yielding risk assets such as the oil prices, Asian equities, copper.
The Aussie was the worst hit by risk-aversion, sell-off almost near 2018 lows of 0.7140. Now, the USD/JPY pair tumbled to 110.40 before recovering to 110.60 towards Asia session closing. The cad also gains some power on Trump’s remarks on the NAFTA deal and ragged USD/CAD down to 1.3115 level.
EURUSD is in tight range still
The Euro is dint changed much on the upside with small moves within tight range. The EURUSD pair is locked above 1.1600 with the economic calendar not having much economic news to offer it is unlikely to overshadow the US non-farm payroll report due later on today.
Trump administration with the political risk of imposing additional tariffs on $200 billion worth of Chinese imports could be a game changer. The popular pair now trades between 1.15824 and 1.16442 and it moved beyond the 10,50,100 EMA indicator.
Sterling in range ahead of the Non-Farm Payroll
GBPUSD is trading in range a well between the levels1. 1.2948 and 1.2913 since last Wednesday’s news of Germany and the UK lower their key Brexit demands. The new balance on the GBP is well position amid of the US labor market report that is probably going to deliver near 200K new jobs in August.
Now the cable has a minor positive tone in the short-term, taking that in consideration the 4 hours chart, technical indicators are still above their midlines although losing bullish momentum. The 20 SMA in the mentioned chart is now flat and around the key Fibonacci level at 1.2887. The pair, however, seems unable to go beyond the 200 EMA, that is any again way flat but tends to act as a directional indication for GBP crosses.