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On Monday, in my morning review, I said that the US is preparing new trade tariffs against China. The Ministry of Foreign Affairs of China did not delay its response, saying that it will take retaliatory measures if the United States will impose additional duties on Chinese imports
The official representative of the Ministry of Trade of China, Geng Shuang, said that China will take counter measures to resolutely protect its legitimate rights and interests.
As for tariffs, so far the breakdown is as follows:
- The US has already introduced tariffs on Chinese goods worth $ 50 billion;
- The US is ready to introduce additional tariffs on Chinese goods worth 267 billion in the near future;
- The US is preparing another $200 billion package of tariffs;
TOTAL: The final cost of taxable goods from China will be more than $505 billion. By the way, according to the US Bureau of Statistics, the amount of $505 billion is equal to the amount of US exports from China in 2017.
China has so far limited itself to retaliatory tariffs in the amount of $50 billion.
The British pound managed to get support and increased against the US dollar. This happened against the background of a good report on the pace of economic growth in the UK in July of this year, which exceeded the forecasts of economists. However, weak data on industrial production counterbalanced the above report and forced investors to take a wait-and-see position on Brexit regarding the future plans of the Bank of England, which will be announced later this week.
According to the National Bureau of Statistics, in July 2018, the growth of the UK economy accelerated, but the growth rate remains quite restrained. Warm weather led to an increase in consumer spending, as well as a positive impact on the construction sector.
Thus, in July this year, compared with June, UK GDP grew by 0.3%. Let me remind you that in June the growth was 0.1%. Good data on UK GDP calmed investors who fear uneven progress in negotiations on the UK's withdrawal from the EU.
In the period from May to June, compared with the previous three months, the UK economy showed an increase of 0.6%. Year-on-year growth was 2.4%. As I noted above, the growth of retail sales and services sector offset weak data on the decline in the manufacturing industry.
The report is very useful, as this Thursday, September 13, the Bank of England will publish its decision on interest rates.
Data on changes in the volume of industrial production in the UK were worse than experts ' forecasts, which limited the growth of the pound in the short term.
According to the Statistics Agency, industrial production in the UK in July this year increased by only 0.1% compared to June, while compared to the same period in 2017, production increased by 0.9%. Economists had expected growth of 0.2% and 1.1%, respectively.
As for the technical picture of the GBPUSD pair, the strong fall of the pound at the end of last week threatens a further uptrend that was formed on rumors related to Brexit. Buyers of the British pound require an operational return to the resistance of 1.2950, above which the demolition of a number of stop orders will lead to the resumption of the upward trend and the renewal of the highs of 1.3025 and 1.3080. In the event of a further downward correction, the breakthrough of support at 1.2900 will form a strong momentum on the pound down, which will lead to a test of the lows at 1.2830 and 1.2790.
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