Yen Rallies As Investors Express Distrust In U.S. President Donald Trump’s Plan To Delay Tariffs On Some Chinese Products
The Japanese Yen grew stronger on Wednesday as investors became skeptic about the decision by U.S. President Donald Trump to hold the tariffs he planned to impose on some Chinese goods.
Investors took the announcement by POTUS with a grain of salt on Wednesday considering the escalated trade dispute between China and the U.S. after trade talk efforts resulted in a stalemate. President Trump announced that his administration would hold off the rollout of the previously announced tariffs against Chinese imports.
The move that was likely aimed at easing the escalated trade tensions. However, currency investors were clearly not having it, thus their decision to place their bets on the Japanese Yen, which is one of the major safe-haven currencies.
Analysts believe that traders are starting to lose the optimism they had about a trade war cease-fire. Instead, there is mounting concern over the impact of the China-U.S. trade war on the global economy.
Investors have thus reduced their investments in currencies such as the US dollar, the Chinese Yuan and even the Sterling Pound. The latter has particularly been struck by the Brexit issue, causing significant weakness over the past few months.
The Yen's strong performance reflected on the USD/JPY currency pair's performance, which peaked at 106.6253 before its bearish downturn. The price of the currency pair's lowest price point for the day was 105.6464.
President Trump And Britain’s New Prime Minister Are Working On A Trade Deal
A senior official in U.S. President Donald Trump's government recently revealed that his government and that of Britain are currently working on a trade deal that might take effect as soon as November 1.
John Bolton, the U.S. national security adviser, visited London recently where he met Liz Truss, the current British trade minister. The talk was about the possibility of a new trade agreement between the two countries.
The U.S. government official revealed that the two sides might sign a deal as early as this month during the G7 summit, which will be held in France.
If the report about the trade deal between the U.S. and Britain is true, then it means that it might take effect just one day after October 31. That's the date set for Britain’s exit from the European Union.
There is a high likelihood that Britain will exit the EU without securing a deal. A trade deal with the U.S. might help soften the landing for Britain’s economy after Brexit.
There are still a lot of issues that need to be addressed with regards to the deal between Britain and the U.S. For example; political leaders believe that Britain will become more dependent on the U.S.
There is also the fact that many British politicians do not like the idea of being too involved with U.S pharmaceutical companies.
Unfortunately, there have been few details about the U.S.-British trade talks, but more are expected to be revealed soon. The deal might also have a positive impact on Sterling's Pound's performance.