China imposes retaliatory 84% tariffs on US products
China responded once more to US President Donald Trump’s provocations by imposing an 84% tariff on all US imports, starting April 10.
It comes after the US raised tariffs on Chinese products to a historic 104%.
The escalation continues to roil the markets, with both US stocks and bonds sustaining unprecedented losses, amid raging concerns about recession and inflation in the world’s largest economy.
Other countries, such as Japan, Britain, and South Korea, expressed interest in negotiating better tariff terms with the US.
Swiss franc rushes to seven-month high as US-China trade war deteriorates
The Swiss franc rose in European trade on Wednesday against a basket of major rivals, expanding the gains for the second straight session against the dollar and hitting a seven-month high on strong haven demand.
US President Donald Trump escalated his pressures on China and went ahead with massive new tariffs, causing disruptions in global markets and raising concerns about global recession.
The Price
The USD/CHF pair tumbled 1.05% today to 0.8380, a September 6, 2024 low, with a session-high at 0.8476.
The franc ended Tuesday 1.5% higher and resumed strong gains after a two-day hiatus from gains.
US-China Tariff War
The US imposed gigantic 104% tariffs on Chinese products starting Wednesday as a punishment to China’s punitive tariffs on US products.
China’s government vowed to fight till the end and called out the “blackmailing nature” of the US.
Best Safe Haven
The Swiss franc has quickly become the safest currency haven in the market right, with the lowest interest rates between the G8 countries, boosting its appeal.
Amid strong odds of higher global inflation once more due to the trade wars, the inflationary pressures are growing on the Swiss National Bank, in turn hurting the odds of a June interest rate cut.
Kiwi skids to five-year nadir after RBNZ rate cut
The New Zealand dollar fell in Asian trade on Wednesday against a basket of major rivals, sharpening its decline for the fourth straight session against the US dollar and hitting a five-year low following the RBNZ’s policy meeting.
The Reserve Bank of New Zealand cut interest rates for the fifth straight session and warned from the risks of the US tariffs, asserting its commitment to accommodative policies.
The Price
The NZD/USD price fell 0.9% today to $0.5485, the lowest since March 2020, with a session-high at $0.5561.
The pair closed down 0.15% on Tuesday, marking the third loss in a row on risk aversion as the global trade tensions spiked.
RBNZ
The Reserve Bank of New Zealand cut interest rates by 25 basis points today to 3.5%, the lowest since October 2022, and the fifth such cut in a row, matching analysts’ expectations.
It’s the first global central bank to review its monetary policies since the US imposed blanket tariffs on imports last week, tanking the global markets.
The RBNZ said the cut is consistent with its commitment to maintain a stable and low inflation rate.
It also warned that recent US tariffs weaken the global economic outlook and pose risks to New Zealand’s growth and inflation.
New Zealand Rates
Following the meeting, the odds of a 0.25% rate cut by the RBNZ in May surged to 95%, with the futures market expecting New Zealand rates at 2.75% by the end of the year.
