The US dollar rose to an 11-month high in the wake of US President Donald Trump's threat to impose more tariffs on Chinese goods by 10% of $ 200 billion, signaling of escalating trade tensions that could hurt global economic growth.
The dollar index hit its highest level against a basket of currencies since July 2017 at 95.30, and with the stability of the higher than resistance level at 95.14, it is likely to continue rising to target levels of 96.50. The rise came as a spike in the conflict between the two countries that would force inflation in the United States to rise because of the rising cost of imports, raising the prospects of more rates hike.
On the other hand, the dollar fell against the yen to its lowest level since June 11 at 109.55. While the euro fell against the US dollar to a two-week low of 1.1530 on expectations that the European Central Bank will keep interest rates unchanged until 2019, as well as the dispute within the ruling coalition in Germany.
Sterling Pound hit its lowest level since the beginning of 2018 at 1.3150 as a trade dispute between the world's two largest economies escalated as markets awaited the Bank of England's decision tomorrow, which is expected to keep rates unchanged. The bank is set to unveil monetary policy stance until the end of the year in the wake of mixed data.
