Trade war uncertainty continues to persist

Chris Lee

Global trade war fears continued to be in play on Monday as trading got underway again – leading to a surprisingly victory for the single European currency.

Despite the ongoing uncertainty about the possibility of a trade deal between the US and China (and the lack of concrete action leading to its possible arrival), the markets were given a glimmer of hope by word that there had been what a Chinese news outlet described as “constructive talks”.

However, statements such as this have been made repeatedly over recent weeks – without any concrete breakthroughs ever occurring.

There is still no guarantee that the sides will sign the deal either this month or next, although this is the aim for many.

The euro, however, managed to rise somewhat in this environment.

The Eurozone itself, which relies heavily on exporting, has been left worried in recent months over the possibility of the trade war dragging on and on with no end in sight.

The single currency was up by 0.1% at one stage in its pair against the US dollar – a rise perhaps fuelled by the comments from the Chinese news source.

It stood at $1.1068 at one stage.

The US dollar index, which is a tool designed to see how the dollar is doing compared to several other major currencies (including the euro, which forms a heavy part of the index’s weighting) was lower.

It was down by 0.1% at one stage and was recorded at 97.90.

The offshore Chinese yuan was seen below its previous recorded point of 7 yuan to the dollar.

The offshore yuan is traded on the open market rather than be set centrally, as the onshore version is – meaning it can fall victim to the moves of international traders.

It was seen going down by 0.1% at one point.

Elsewhere around the world, the British pound appeared to continue to be gripped by election fever.

The country’s general election, which is scheduled to take place on 12th December, has been a motivating factor in the movement of the pound recently.

There are suggestions in some news outlets that Boris Johnson’s Conservative Party could be on course to win a large majority – although not all analysts are convinced that this potential outcome will occur.

One public opinion poll in the country seemed to suggest that the Tories are enjoying a 14-point lead over their closest rivals.

The long-term eye of the markets is, however, on whether or not a Brexit deal can be achieved once the election is over.

Johnson’s announcement recently that every single one of the Conservative candidates standing across Britain has confirmed that they will vote for his Brexit deal was interpreted positively.

The pound was seen up by 0.3% at one point in its pair with the US dollar and was recorded at $1.2945 at one point.

In its pair with the single European currency, it is now at its highest point for half a year.

It was recorded at 85.41 pence to the euro at one stage on Monday.

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