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Hello everyone, today Avatrade Aihua Foreign Exchange will bring you "[Avatradescn]: It is rumored that Trump's tariffs on China will be reduced to 50%!". Hope it will be helpful to you! The original content is as follows:
The US dollar index rose on Thursday, and market sentiment was calmed after the United States and the United Kingdom reached a bilateral trade agreement, and the US dollar strengthened against the safe-haven currencies Japanese yen and Swiss franc. The pound gave up its gains after the Bank of England cut interest rates.
U.S. President Trump announced on Thursday a "breakthrough" trade deal with the UK, which retains a benchmark tariff of 10% on British imports, including cars.
Axel Merk, president and chief investment officer of MerkHard Currency Fund, said that the market regards the trade agreement as a positive, believing that Trump sets a 10% benchmark tariff on friendly countries, and that if the excess is exceeded, it can be negotiated again.
Merk added: "The market interprets this as good news today. But in my opinion, the 10% benchmark tariff is still high for imported goods, and has also changed my view on global trade operations." Steve Englander, head of currency strategy at Standard Chartered Bank, pointed out that the agreement could become a template for other countries to sign trade agreements with the United States.
Englander said: "If the market believes that this agreement is feasible, it is news of a favorable and risky asset. At that time, the market will observe the details and think about whether it can be applied to other countries or as a template for future agreements."
The New York Post quoted sources on Thursday as saying that as the United States and China are about to start their first formal negotiations, the Trump administration is considering reducing tariffs on China from the current 145% to 50% as early as next week. Sources also said the U.S. tariffs on neighboring South Asian countries could also be reduced to 25%.
U.S. Treasury Secretary Becent sets off forSwitzerland will meet with China's Vice Premier He Lifeng.
They intend to reduce tariffs to 50% during negotiations." The source said: "During the negotiations, they intend to reduce tariffs to 50%.
Asian Market
Minutes of the Bank of Japan's March meeting showed that policymakers are increasingly concerned about the external risks posed by U.S. tariff policies.
One member warned that the downside risks of these policies “intensify rapidly” and could seriously damage Japan’s real economy, and advised the Bank of Japan to “be particularly cautious when considering the timing of the next rate hike.”
However, not all board members advocate a cautious stance. Another member stressed that the Bank of Japan should not automatically default to a cautious stance even in the face of increased uncertainty and said the Bank of Japan "may face a situation where decisive action should be taken."
The third voice in the board of directors underscores the importance of incorporating inflation expectations, price upside risks and progress in wage growth into the Bank of Japan's policy review. If the situation changes significantly, domestic development can still justify tightening of monetary policy.
In addition, Bank of Japan Governor Kazuo Ueda emphasized this message in his speech in parliament today, acknowledging that while food price fluctuations (especially rice) are still high, these pressures will ease over time.
Nevertheless, given the increasing uncertainty of the global economic environment, Ueda emphasized the importance of paying close attention to price trends.
New Zealand Fed President Christian Hawkesby warned today that rising global tariffs are having a significant negative impact on global economic activity, prompting the central bank to lower its forecast for global growth.
Hoksby addressed the parliamentary avaforexcn.committee that the impact of the tariff wave was “clearly” harmful. He added that while New Zealand faces a challenge of 10% U.S. export tariffs posed by 10%, a weaker New Zealand dollar could help alleviate some of the blow. Still, weak demand from major trading partners is now increasingly worrying about the country's prospects.
Hawkesby contrasts the supply-side disruption caused by current tariffs with supply disruptions during the COVID-19 pandemic, emphasizing that both can cause long-term economic distortions.
"We learned from our experience and COVID experience that the supply side impact is huge and lasting and can pose a real challenge," he said.
He added that the situation remains unstable and there is considerable uncertainty about how the structural dynamics of the global economy will adapt to this new trade regime.
European Market
The Bank of England lowered its benchmark bank interest rate by 25 basis points to 4.25%, in line with market expectations. However, this decision reveals rare tripartite differences among policy makers.
Five members support a 25 basis point cut, while CatherineMann and chief economist HuwPill voted to keep interest rates unchanged. On the dovish side, Swati Dhingra and Alan Taylor support a further 50 basis points cut.
In the accompanying statement, the Bank of England reiterated that it is still appropriate to take a "gradual and cautious approach" while lifting currency restrictions.
While acknowledging progress in inflation, the central bank stressed that policy needs to be “restrictive for a long enough time” to ensure inflation is sustainable to return to the 2% target.
In its latest monetary policy report, the Bank of England's baseline forecasts predict CPI inflation will rise to 3.5% in the third quarter of 2025 before falling back to 2% in the medium term.
But policy makers outline two risk-filled alternative scenarios. The first is a scenario of declining demand, assuming that increased uncertainty suppresses domestic spending and inflationary pressures subside faster. Under this path, the economy faces a larger output gap, with inflation lower than the baseline by three years -0.3%.
In contrast avaforexcn.com, the second scenario envisages a continued presence of higher inflation, i.e., a short-term rise in overall inflation triggers a second round of impact on wages and prices, coupled with weak productivity growth. In this case, the impact on growth is not large, but inflation is 0.4% higher than the baseline throughout the forecast period.
U.S. market
As of the week ended May 3, the number of first-time unemployment benefits in the United States fell -13k to 228k, lower than the expected 235k. The 4-week moving average of the number of first-time unemployment claims rose 1k to 227k.
As of the week ended April 26, the number of people who renewed unemployment benefits fell by -29k to 1879k. The 4-week moving average of the number of people who continue to apply for unemployment benefits rose by 9k to 1875k.
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