Yen Gains as Trade War

The safe haven was broadly higher on Monday after uncertainty at the next stage in the US-China war.

Uncertainty over the US-China trade dispute continued after US President Donald Trump said on Friday that he was unwilling to strike a deal with China.

Goldman Sachs over the weekend lowered its forecast for U.S. economic growth, warning that a trade deal was not possible before the 2020 presidential election and that the risks of a recession were increasing.

In a note, the bank said, “Overall, we have increased our appreciation for the impact of the rising trade war,”

The National Bank of Australia lowered its ratings on a range of major currencies as it now expects “nothing positive will happen” on the trade front at least until early 2020.

He predicts green returns will hold steady in the face of policy easing from other major central banks while Aussie, kiwi and euro are seen on a slippery slope.

The British pound was at its lowest levels not seen since 2016, trading at 127.27 yen. The euro was also weaker against the Japanese currency at 118.04 yen and close to its lowest level since April 2017.

The dollar was a touch lower against the offshore yuan as the Chinese central bank’s daily fixing came in stronger than market expectations.

A week ago, China allowed its currency to slide to less than $ 7 for the first time since 2008, which some saw as a US tariff offset.

All eyes will be on Chinese figures in July for retail and industrial production due Wednesday to assess the impact of the long-running dispute with the United States on domestic activity.

Market attention will also be at the annual US Reserve Symposium in Jackson Hole later in the week, with investors hoping to get some clarity on the future interest rate path.

The pound reached a two-year low against the dollar on Friday after data showed that the US economy contracted unexpectedly in the second quarter, only adding to the Brexit rebate and the possibility of an exit deal.

The euro was a touch lower against the dollar at 1.1185 after weighing the prospect of early elections in Italy

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