China's response was not long in coming. If at the end of last week, the US raised duties on imported goods from China, then yesterday Beijing announced that it would increase duties on imports of goods from the US in the amount of about $60 billion. Duties will be effective from June on a number of American goods and will increase to 25% from the current 5% -10%. The State Council of China said that this step was taken after the US imposed punitive duties on Chinese goods worth $200 billion at a rate of 25%.
However, we should not forget that the White House has repeatedly warned that in case of retaliatory measures, a package of new duties on Chinese goods will already be prepared worth $300 billion.
Yesterday, US President Donald Trump said that China has been doing well for many years at the expense of the United States. However, despite trade differences, Trump plans to meet with representatives of China at the G-20 summit. According to him, the United States and China are in an excellent position, regardless of whether an agreement will be concluded. The US President also noted that the decision on duties on additional goods from China was not taken.
As for fundamental statistics, attention was attracted only by the report of the Federal Reserve Bank of New York, in which it was indicated that inflation expectations were lower. According to the data, in April of this year, consumer expectations for future price growth decreased. It is predicted that in a year, inflation will reach 2.6%, and in three years – 2.7%. Expectations for future revenues also weakened, showing an increase of only 2.4% against 2.6%.
Yesterday's speeches of the Fed representatives were of a formal nature.
On Monday, the President of the Federal Reserve Bank of Boston, Eric Rosengren, said that the ongoing trade conflicts could harm the global economy, but it is still too early to assess the effects of recent trade disputes between the US and China, as countries can still manage to conclude a trade agreement.
Rosengren also noted that the Fed's policy should focus on short-term prospects since the Committee had the opportunity to take the time to make changes in monetary policy. According to the representative of the Fed, the current level of interest rates is quite acceptable and does not require adjustment.
As for the technical picture of the EURUSD pair, yesterday's attempt by the bulls to resume the upward trend was unsuccessful, which puts the current short-term trend at risk. It is best to consider long positions in the trading instrument after correction to the support of 1.1220 or from a larger minimum of 1.1180, which coincides with the lower border of the side channel. The entire focus of buyers today will be shifted to the resistance level of 1.1250, the breakthrough of which will strengthen the upward momentum in the trading instrument.
The material has been provided by InstaForex Company - www.instaforex.com