US/EU Tariffs Turmoil as AUD/USD Slips to Bears
Published on: 10/4/19 10:23 AM
The first week of October 2019 caught the FX Market unawares to new US tariffs bombshell on various EU goods top among them Airbus, and the grim reality of unpredictable turbulence ahead. From down under, the Aussie stirred to set up AUD/USD pair for lively bears trading. Forex Broker comparison service FXBrokerFeed brings you news, and spins in the FX Broker Market, featuring AUD/USD bear runs, and breakout of a new tariffs war.
EU/US tariffs War Escalates
The World Trade Organization (WTO) granted the US greenlight to impose $7.5 billion worth of tariffs on European origin goods, a move that could open a new tariffs war frontier. This is at a time the global economy is in a slump, and sliding towards a recessionary precipice.
Response to tariffs announcement targeting Airbus aircraft parts and luxury items was swift and uncompromising. Said Bruno Le Maire, the French Finance Minister “If the American administration rejects the hand that has been held out by France and the European Union, we are preparing ourselves to react with sanctions.”
The tariffs come after a year-long standoff between the US and EU
, with each hurling accusations about alleged illegal government subsidy for both aircraft manufacturers.
Stocks for both Boeing and Airbus reacted on sentiment to trade below 1% and 2.5% respectively. However, the EU will have to wait till early 2020 for a WTO ruling on its own proposed set of counter tariffs.
AUD/USD in Bear Territory
The Australian Dollar was on a rebound from a year-low of 0.6671 to test new support level at 0.6700 Thursday. This was after Reserve Bank of Australia cut the official cash rate
(OCR) by 25 bps.
RBA Governor Philip Lowe announced the action as “a renewed focus on structural measures to lift the nation’s productivity performance”. The Governor indicated further easing stimulus at upcoming November 4 meeting.
September weak data, and flat Relative Strength Index (RSI) continued to track the currency pair on a downtrend but in short bias brisk trading for the bears.
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