- The AUD/USD falls about 0.6380 due to a recovery movement in the US dollar.
- Investors have taken China’s consideration of suspending tariffs on some US imports as something positive for the unwinding in the commercial war between the US and China.
- The requests for durable goods in the US increased at a robust rate of 9.2% in March.
The Aud/USD torque falls abruptly about 0.6380 in the American session on Friday. The Australian pair weakens as the US dollar (USD) takes up its upward recovery after a corrective movement on Thursday. The American dollar index (DXY), which follows the value of the dollar against six main currencies, is recovered to about 99.70 and sees more rise above the immediate maximum of 100.00.
The dollar has attracted offers this week before signs that the commercial war between the United States (USA) and China has begun to unwind. On Thursday, Beijing declared that it is considering suspending additional tariffs on some US imports, such as medical equipment and some industrial chemicals, according to Bloomberg.
This week, US President Donald Trump also expressed confidence that the White House will reach an agreement with China. “The discussions with Beijing are going well,” Trump said and added that he believes that they will reach an agreement. “
Financial market participants expect an improvement in commercial relations to be favorable for the US, given their strong dependence on China imports. On Thursday, the solids orders for lasting goods in the US showed that the impact of tariffs announced by Washington has begun to be reflected in the economy.
The cost of the orders of durable goods received by the owners of the factories increased at a robust rate of 9.2% in March, compared to the estimates of 2% and the previous publication of 0.9%. Business owners would seek to transfer the impact of higher costs to consumers. Such scenario will boost inflation and limit the Federal Reserve (FED) in supporting the expansion of monetary policy.
Meanwhile, the Australian dollar (AUD) is low performance on Friday in front of its peers after a strong increase in the last two weeks. The audiences of the AU are still uncertain until both China and the US reduce additional tariffs recently imposed. The impact of a deceleration on the Chinese economy will also be visible in Australian exports, since it is Beijing’s largest business partner.
Commercial War between the US and China Faqs
In general terms, “Trade War” is a commercial war, an economic conflict between two or more countries due to the extreme protectionism of one of the parties. It implies the creation of commercial barriers, such as tariffs, which are in counterbarreras, increasing import costs and, therefore, the cost of life.
An economic conflict between the United States (USA) and China began in early 2018, when President Donald Trump established commercial barriers against China, claiming unfair commercial practices and theft of intellectual property by the Asian giant. China took retaliation measures, imposing tariffs on multiple American products, such as cars and soybeans. The tensions climbed until the two countries signed the Phase one trade agreement between the US and China in January 2020. The agreement required structural reforms and other changes in China’s economic and commercial regime and intended to restore stability and confidence between the two nations. Coronavirus pandemia diverted the attention of the conflict. However, it is worth mentioning that President Joe Biden, who took office after Trump, kept the tariffs and even added some additional encumbrances.
Donald Trump’s return to the White House as the 47th US president has unleashed a new wave of tensions between the two countries. During the 2024 election campaign, Trump promised to impose 60% tariff particularly in investment, and directly feeding the inflation of the consumer price index.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
