The resignation of US economic adviser Gary Cohn has plunged the stock markets globally, at the same time raising JPY and lowering USD. His decision comes as a result of losing the battle with other White House politicians, against the imposition of import tariffs on steel and aluminum. In addition to worries, Trump added that he is considering a wide range of import tariffs on Chinese goods.
If we thought, three days ago, that the US is only considering import tariffs, we are now sure that this will happen.
Here's what will follow in the coming days
Without any doubt, in the next few days we will see increased volatility in the markets as investors will begin to weigh the worst scenario of a trade war. The most important thing we are interested in as a trader is how he will turn the rest of the world to Trump's intentions. If we see a hit in the form of import tariffs by large importers of US goods, the markets will definitely go into correction. If, however, reason prevails and we have no responses, what we will observe in the indices will be a strong caution and, most likely, a wide range near the peaks.
What's next about interest rates and USD?
It is important to note that FED does not like insecurity at all! If Trump decides to make all his chores, the raise in interest rates this year will be severely reduced. This, in turn, will lead to weakness in the dollar and will somewhat support the stock markets. There is currently no strong gold gain, but weak dollar and increased uncertainty will definitely make investors hedge their portfolios.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not directed at residents of the United States or Belgium and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.