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EU boss comes out against Trump’s tariff claims

A leading light in Europe’s central banking system has described US President Donald Trump’s penchant for tariffs as “regrettable”.

Olli Rehn, the governor of the Bank of Finland, who is now a member of the European Central Bank’s (ECB’s) Governing Council, also said that he believed the US would cause problems for the international community if it quit the World Trade Organisation (WTO).

Despite the risk that talk of trade barriers sometimes poses on the market, the euro actually rose – even against the dollar. The EUR/USD pair went up by a marginal amount, 0.09%, and reached $1.1677.

This is not the first time recently that an EU leader has come out against the President. In fact, there have been several interventions on the part of senior European leaders recently.

Ewald Nowotny, a colleague of Rehn’s on the Governing Council of the ECB, had sharp words for Trump.

“The economic policy of the United States is currently one of the substantial risks to the global economy,” Nowotny said.

He claimed that Europe was now facing problems as a result of the rise in the value of the greenback, which has emerged largely as a result of investors searching for “safe” destinations to invest.

Europe will increasingly feel the need to leave a situation which has what he described as “one-sided dominance”, he said.

The provocation came as Donald Trump appeared to suggest that tariffs on European cars were a possibility in the coming months.

“Their consumer habits are to buy their cars, not to buy our cars,” he told major American network Bloomberg.

Jean-Claude Juncker, the President of the European Commission, expressed his hopes that Trump would not go ahead with the introduction of these particular trade barriers.

The US and the EU met for trade talks earlier last month, and that meeting appeared to go well.

“We agreed today, first of all, to work together toward zero tariffs, zero non-tariff barriers and zero subsidies on non-auto industrial goods,” Trump told reporters once the meeting had concluded.

However, the latest developments may indicate that this may no longer hold true – a phenomenon which has been seen in several examples of Donald Trump’s negotiation habits.

Aside from the ongoing US-led trade spats which are seemingly dominating the forex markets almost every day, there are plenty of other key events to watch out for in the economic calendar in the coming days.

North American markets may be somewhat sluggish at the start of next week as the US and Canada celebrate public holidays on Monday.

A number of key Australian information releases will come out, though. Information on ANZ job advertisements in August is due, as is retail sales data for July. Company gross operating profits for the second quarter are also coming out.

On Tuesday, the Reserve Bank of Australia will make its key interest rate decision – although it is expected to keep the rates where they currently are, which is at 1.5%.

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