The euro stabilised on Monday after last week’s big losses but the
threat of an escalating global trade war, a dispute in Germany’s
governing coalition and a more dovish-than-expected ECB all weighed on
the single currency.
After suffering its biggest drop in a month after the European
Central Bank said it would keep rock-bottom interest rates on hold
through the summer of 2019, the euro slipped again on Monday before
recovering slightly to trade up 0.1 percent on the day at $1.1621, off
its recent lows of $1.1543.
A decision by the United States on Friday to enact tariffs on $50 billion in Chinese goods was the latest salvo in a widening trade dispute between the world’s biggest economies, keeping broader markets on edge.
China’s official Xinhua news agency said Beijing would impose 25 percent tariffs on 659 U.S. products, ranging from soybeans and autos to seafood.
Currency reaction outside of specific highly trade-dependent Asian countries has been limited so far, but the worry for investors is that these tit-for-tat developments will eventually hurt global growth.
A broader trade conflict would be particularly troubling for Europe given President Donald Trump has signaled that he wants to slap tariffs on automobiles. European shares fell sharply on Monday.
Tensions with the governing coalition in Germany also weighed on the euro. Chancellor Angela Merkel’s Bavarian allies may defy her by implementing a plan to limit immigration at the German border and risk destabilizing her three-month-old coalition.
A decision by the United States on Friday to enact tariffs on $50 billion in Chinese goods was the latest salvo in a widening trade dispute between the world’s biggest economies, keeping broader markets on edge.
China’s official Xinhua news agency said Beijing would impose 25 percent tariffs on 659 U.S. products, ranging from soybeans and autos to seafood.
Currency reaction outside of specific highly trade-dependent Asian countries has been limited so far, but the worry for investors is that these tit-for-tat developments will eventually hurt global growth.
A broader trade conflict would be particularly troubling for Europe given President Donald Trump has signaled that he wants to slap tariffs on automobiles. European shares fell sharply on Monday.
Tensions with the governing coalition in Germany also weighed on the euro. Chancellor Angela Merkel’s Bavarian allies may defy her by implementing a plan to limit immigration at the German border and risk destabilizing her three-month-old coalition.
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