May 05, 2019
Chinese Volatility Boosts Trading Opportunities
The recent trade war between the US and China is taking center stage again, with the relationship between the two countries taking strain. As a result, the Chinese stock market is down by 5.5% today. Interestingly, it was two tweets by President Donald Trump that triggered a decline in the market. In his tweets, Trump stated that on Friday this week, the US will raise taxes on Chinese products, from 10% to 25 percent. As a result, Chinese products will become more expensive. While China has worked hard to avoid this increase, Trump stated that the negotiations with China are not progressing positively, as stated in his tweet, “The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!”
The current tensions between the US and China could also negatively impact the global stock markets. As a result, the US and EU markets are expected to also decline. In addition, some stocks, such as Alibaba and Apple, could also be negatively impacted, as their operations are based in China.
In other financial news, the AUD/USD pair is also trading lower today. The Australian dollar has been impacted as China is Australia’s biggest trading partner. Also, the AUD/JPY pair is trading low with a scissors effect. That is, the AUD has declined based on China, while the JPY has strengthened on market volatility.
As a result of the markets movements and Chinese volatility, global traders can expect some solid trading opportunities today.