The U.S. dollar went high against many currencies today due to the strong U.S. jobs report and the trade conflict revolving around China.
On Friday, the U.S. President Donald Trump warned to impose tariffs of $267 billion on all Chinese goods in an addition to the already $200 billion, which is facing the duties’ risk.
Mizuho Securities’ chief strategist, Masafumi Yamamoto said that if the U.S. economy has been profited by its protectionist moves, then that is the initiation of risk aversion. It is still going to be a downfall of the dollar against yen.
He warned that the markets have not fully reacted to the impact of the U.S. tariffs on Chinese imports.
The index of the dollar against six major currencies was 0.1 higher in percentage at 95.425 that records its reaching close to a three-week hike of 95.737.
After the U.S. job reports, the dollar index went 0.3 percent high. The wages recorded was the largest in terms of annual gain after nine years.
The strong data even boosted the demand of dollar and influenced the higher interest rates by the U.S. Federal Reserve, which is certain to raise interest rates for the third time in this year.
The further imposing of tariffs on Chinese goods will lead to a weaker yuan and higher dollar value as proposed by Minori Uchida, MUFG Bank’s chief strategist. He also added that if the Asian emerging currencies keep on declining then the other emerging markets will be too and when the risk goes off, the yen is also going to strengthen.
As the emerging market slips, the dollar keeps firm against all odds. The U.S. reports regarding larger growth rate also influenced the same. Now, the markets are threatened after Trump’s warning to impose $267 billion in tariffs on Chinese goods.