EUR/USD: Dollar Gains as Fears of a Trade War Diminish

In the past one month, the EUR/USD pair has moved up and down. It has moved to a high of 1.2477 before losing the gains to a low of 1.2237.

The pair reached the above high on March, 27 following increased pressure about trade. Then, investors believed that the dollar would be a bigger loser if the United States started a trade war.

This is because China is primarily a communist country. As such, tariffs on Chinese goods would not be felt on a larger scale than those in the United States. In other words, Chinese supplies are more widespread than those of the U.S.

On the other hand, the products China would target from the United States would be felt by specific regions. For example, most of the soybeans the U.s exports to China come from Ohio, where Trump has a lot of support. In addition, targeted tariffs on planes would affect a company like Boeing, which manufactures its planes in the U.S. Therefore, in case of a trade war, the U.S would be the most affected.

Going forward, it is going to be a very difficult environment for the dollar. Yes, the economy is improving, more people are working, the manufacturing industry is doing well, and the country has become the leading producer of oil. However, most of these things happened before there were prospects of a trade war.

Today, the dollar is higher slightly following hopes that the tariffs announced by China and the U.S will not go into effect. This is a relief to many in the market who believe that dialogue is the only solution to the ongoing problems.

The post EUR/USD: Dollar Gains as Fears of a Trade War Diminish appeared first on Forex.Info.

Source:: EUR/USD: Dollar Gains as Fears of a Trade War Diminish

Won't your trader friends like this?
About the Author
With over a decade of trading expertise and 100,000 fulfilled clients in 160 countries worldwide, easyMarkets will tick all your boxes whether you are a new or experienced trader, affiliate or introducing broker. [space height="20"] Trade 300+ markets including currencies, commodities, metals, vanilla options and indices from one place without the jargon, complicated offers and confusing terms! [space height="20"] Welcome to the exciting world of trading. Welcome to easyMarkets.

Leave a Reply