US Dollar grows on the new trade conflict
The US dollar entered a new buying wave in early European trading on May 4. Traders began seeking safe haven again, as the international relations have been soured by new tensions between the United States and China.
At 07:00 the US Dollar index gained 0.3% and reached 99.377. EUR/USD lost 0.4% and stood at 1.0938. GBP/USD lost 0.3% and stood at 1.2462. USD/JPY lost 0.1% and stood at 106.81.
On May 3 US Secretary of State Mike Pompeo stated that he has some “significant evidence” that the coronavirus escaped from a lab in Wuhan. He did not yet provide any details about the nature of said evidence, as well as his sources. Beijing has also been accused of hiding the information about COVID-19 in the beginning of December. China refuted all accusations.
Earlier President Trump threatened to reintroduce trade tariffs, potentially reigniting the trade war with China. First part of the negotiated compromise came into effect in January, before the virus’s spread accelerated.
Meanwhile Chinese economy is still depressed. The national GDP contracted for the first time in three decades. US economy is not in a much better place - 30 million people filed initial jobless claims in the last six weeks.
Nevertheless, the actions of US government do not show signs of preparing for a new trade conflict yet. The levying of the import tariffs on a number of Chinese goods, trying to hold down the growth of the prices.