The New Zealand Dollar falls back below .6900 this morning. Commodity currencies, oil, and stocks all in the negative as trade threats intensify.
Escalating Trade War
US Treasury Secretary Steven Mnuchin, in a tweet overnight, called the investment restrictions on China reported by numerous media outlets, as “false, fake news”. He stated that these would apply to “all countries trying to steal our technology”. White House trade and manufacturing adviser Navarro later mentioned that any investment restrictions proposed by the Trump administration would target China and not other countries. “All we’re doing here with the President’s trade policy is trying to defend our technology when it may be threatened. So this whole idea that there’s going to be investment restrictions to the world, please, discount that”.
Harley Davidson has said it would shift production of motorcycles shipped to the European Union out of the US to one of its international facilities, to avoid higher costs and protect itself from EU tariffs. Trump had promised to make the iconic motorcycle company great again when he took office last year and so far his trade policy is having the opposite effect.
China’s central bank frees up US107bn to boost economy
China’s central bank will cut the amount of cash some lenders must hold as reserves, unlocking about 700 billion yuan (108billion USD) of liquidity, as it seeks to control leverage and support smaller companies. Analysts expect the bank to further ease policy to support a slowing economy and offset the potential negative impact of US-China trade.
Data is light today with key focus on tonight’s USD consumer confidence numbers for June, and risks remain as we see more developments in the tit for tat trade war.
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