Entering into US session, Dollar and Yen are trading as the weakest ones. Europeans are the strongest ones. Reactions to the possibility of new tariffs on China are relatively muted so far. Asian stocks were down but losses were limited. Forex markets looked like they shrugged off the news. There are two possible explanations. Firstly, traders may be waiting for the news to be confirmed before acting. Secondly, the rumored 10% tariffs are much less severe than the original proposed 25%. Now, focus is immediately back on last week’s low of Dollar and Yen against Europeans. In particular, the closest levels are 0.9633 in USD/CHF, 1.3142 in GBP/USD and 147.00 in GBP/JPY.
Major European indices are trading slightly softer at the time of writing. FTSE is down -0.13%, DAX down -0.32%, CAC down -0.05%. Earlier today, Hong Kong HSI closed down -1.3% and Singapore Strait Times lost -0.63%. Nikkei was on holiday.
In particular, China’s Shanghai SSE dropped -1.11% to 2651.79, lowest in nearly four years. Key support level at 2638.30 looks more vulnerable than ever. However, it’s unsure whether downside momentum will pick up again when this key support is broken.