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The USD moved lower on the back of concerns about tariff wars, especially with China. Trump last week accused China of breaking the trade deal.
China firmly rejected the claim and countered that it was the United States that breached the deal. The Chinese Ministry of Commerce stated that the U.S. had implemented several “discriminatory restrictive” measures against China, including:
Issuing guidance on AI chip export controls
Halting sales of chip design software to China
Revoking visas for Chinese students
China asserted that these actions seriously undermine the consensus reached at the Geneva economic and trade talks and damage China’s legitimate rights and interests.
Late Friday, President Trump announced that the United States will double tariffs on imported steel and aluminum from 25% to 50%, effective June 4, 2025. This increase applies broadly to imports from all countries, including China. The move aims to bolster the domestic metal industry and reduce reliance on foreign suppliers.
Later today, the White House said we want countries “best offer” by Wednesday in tariff talks.
And you wonder why the USD was hit?
The USD is trading down the most vs the NZD (-1.33%) and the AUD (-1.00%). The greenback did the best vs CAD at -0.21% after a new move to the lowest level since October 2022 failed. The dollar was down -0.62%vs the GBP adn teh -0.83% vs the EUR.
The US yields moved higher on the day with the 2 yhear up 2.0 bps at 3.938%. The 10 year yield moved up 2.6 bps at 4.443%.
The US stocks did erase early declines which was confusing unless you believe that all will pass over time. The Nasdaq led the way with a gain of 0.67%. The S&P was up 0.41% while the Dow rose 0.08%.
The ISM manufacturing index today stayed below 50 at 48.5 vs 49.5 last month. Construction spending also was weaker at -0.4% vs +0.3% estimate. The prior month was revised lower to -0.8% vs -0.5%. That data supports a lower dollar.
And to add more confusion in the “witches brew” that defines the markets (or doesn’t), the Atlanta Fed GDPNow forecast for Q2 growth continued the surged to 4.6% from 3.8% in its current guesstimate. Recall first quarter GDP was at -0.2%.
This article was written by Greg Michalowski at www.forexlive.com.
Eurozone PMI manufacturing was finalized at 49.4 in May, up from April’s 49.0 and marking the highest level in 33 months. Production increased across all four major economies: Germany, France, Italy, and Spain, supporting economist Cyrus de la Rubia’s view that the recovery is gaining traction. De la Rubia also noted that output has now […]
The post Eurozone PMI manufacturing finalized at 49.4, recovery progressing appeared first on Action Forex.
The EURUSD moved higher earlier today and in doing so reached toward a swing area high between 1.1406 and 1.14239. The price traded mostly above the low of that swing area (there was one brief look below the low of the level which was quickly reversed)
The buyers are more in control. The next key target comes at the 1.1479 level which goes back to April 21 and April 22. It would take a move below the 1.14066 level to turn the buyers into sellers.
This article was written by Greg Michalowski at www.forexlive.com.
More from Logan:
On oil production, the Trump administration’s has touted the idea of drill, drill, drill and may have swayed OPEC plots to increase production in his quest to get prices of oil and gas lower. He often cites gas at less than $2, but not sure I have seen that. AAA has the average price at $3.10 to $3.20.
The Baker Hughes rig count has been trending lower and is down at multi year lows
This article was written by Greg Michalowski at www.forexlive.com.
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