The US Dollar could not maintain momentum against some of its rivals and was broadly lower a a result. Concerns over a brewing trade war continue to be a hot button issue with FX traders. On Tuesday, the Office of the US Trade Representative stated that, later this month, tariffs in the amount of 25% would be placed on $16 billion worth of Chinese goods and products. President Trump is hoping that he will be able to put enough pressure on the Chinese government to get some trade concessions; Beijing, however, has vowed retaliatory moves.
As reported at 10:48 am (JST) in Tokyo, the USD/JPY was trading at 111.405 Yen, a gain of 0.02%; the pair has ranged from a session trough of 111.303 Yen to a high of 111.439 Yen. The AUD/USD was trading at $0.7433, up 0.1710%, while the NZD/USD was flat at $0.6737.
Trade War Escalation a Concern
One currency strategist in Tokyo said that markets are waiting to see if the tariffs have a negative impact on the US economy at which time they may be forced to reconsider the Federal Reserve's likely response. Some argue that the tariffs could impede growth which might lead to the Fed postponing another 2018 rate hike.