Tensions between Europe and the US heightened as the European Commission President said Trump wouldn’t impose tariffs on Euro cars. The EUR/USD pair slumped 0.15% at $1.1033 as US-China trade talks develop.
EU Trade Commissioner Malmstrom and US representative Robert Lighthizer were in contact over transatlantic trade last month. It was the first since the previous round of US tariffs on Europe.
US Commerce Secretary Wilbur Ross said new talks with Europe could be an alternative to imposing new car duties last month. However, the US Commerce Department refused to comment on Juncker’s statement.
Washington must finalize their 25% tariff on vehicles under Section 232 on November 14. The European tariffs were already delayed six months prior; experts say it could happen again.
Trump announced tariffs on $7.5 billion eurozone goods last month related to a dispute at the World Trade Organization.
The Chinese American trade war will affect both European and British currencies, analysts claim. The opposing countries’ “Phase One” deal was the primary reason why USD gained in recent sessions.
USD/CNY surged almost 0.2% at ¥6.9891, while GBP/USD inched down by 0.03% at $1.2809.
British General Election Helps the American Dollar
In Britain, investors hesitate to make moves on Sterling, helping the American Dollar. The Conservative Party is expected to win polls, but uncertainties weigh lightly on the pound.
Two Bank of England policymakers’ votes for an interest cut held the sterling back. As a result, GBP also fell against the Australian Dollar.
Foreign exchange strategist Lan Nguyen said the news should “limit the appreciation of the Pound over the medium to long term.” Ultimately, the general election will determine the currency’s path.
Australian trade balance figure beat forecasts from 5,926 to 7,180 million. The Reserve Bank of Australia’s monetary policy will affect much of its value, as a boost could renew hopes for the Aussie’s economic recovery.
Commonwealth Bank of Australia’s Senior Economist Gareth Aird claimed none of the major currencies would reflect on their trade balance.