Dollar in loss
The British pound touched 1.32 against the dollar on Tuesday due to weakness in the US currency, but analysts remained wary of the sterling outlook as a new round of Brexit talks began.
The dollar index fell to 92.29 due to the decline in US bonds, weak economic data, the Covid19 epidemic that continues to sweep across most states, and the inability of politicians in Washington to agree on a new aid package.
Similarly, the common currency of 19 European economies, the Euro climbed to its highest level in the last two years against the dollar. The climb in the Euro, which tested 1.1944, was supported by the atmosphere in the European indices that turned positive.
Washington impasse
Despite tens of millions of jobs lost, the breakdown of supply chains, and the collapse of many medium and small businesses due to socio-economic restrictions against the Covid19 epidemic since March politicians in Washington continue to fail in agreeing on a new stimulus package to help overcome the huge blow to the economy.
Covid19 killed an average of 1,000 people on a daily basis in the US last month, CNN estimates.
Speaking on Monday, President Donald Trump blamed Democratic leaders, Nancy Pelosi and Chuck Schumer, while Democrats accused the White House and Republicans over funding to the US postal service ahead of the presidential election.
With the Congress in recess, White House Chief of Staff Mark Meadows said they are not expecting another meeting with Pelosi and Schumer.
Political conflict over the 5th aid package in the US is one of the factors that led to the weakening of the dollar. Minneapolis Fed Chairman Neel Kashkari stated in an interview with CNBC television over the weekend that it was essential that the federal government continued to fiscally support the economy.
Tariff attack from china
The People’s Republic of China, which has suffered from the trade and technology wars with the US, might be taking its revenge from the US allies in the Indo-Pacific.
After Australia requested an international independent investigation into the origin of Covid19, which spread from the Chinese city of Wuhan and led to an unprecedented global recession, Communist Beijing does not seem to be leaving the Canberra government alone.
At the beginning of the summer, as its sensitive internet networks were attacked in a large and coordinated attack, and Australia then suddenly found itself in a tariff conflict with China.
China has now opened a dumping investigation into its wine after targeting Australian barley, beef, tourism, and higher education. The number one customer for Australian goods, services, and commodities is China. Every step China takes against the continental country with a population of 25 million affects ordinary Australian farmers and workers.
Canberra filed an official dispute against China’s tariffs in Beijing, stating it may refer the issue to the World Trade Organization, Australian officials told Reuters on Tuesday.
Regional tariff war
Another American ally that China has targeted is India. According to the Hong Kong-based South China Morning Post newspaper, Beijing has extended its anti-dumping tariff on fiber optic products manufactured in India.
Trade ties are deteriorating between the world’s two most populated countries, damaged by the deadly border conflict in June.
Meanwhile, India increased the number of new inquiries on Chinese imports and imposed fresh taxes on various products.
Goldrush
Last week’s corrective drop in precious metal, which rose with the Beirut explosion to a historic peak along with geopolitical tensions, the Covid19 outbreak, and recession, has reversed.
Global investors who took shelter in gold’s safe-haven, pricing it well over $2000 again.
