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Trade wars are good and easy to win: Discuss

10% is better than 25%

Not until you read the list of targets for the latest round of Trump tariffs do you appreciate quite how many varieties of fish, glass and nesoi are produced by China. The US will apply a 10% import tax to 5,745 items of Chinese origin. And investors, it seems, are not unduly concerned.

Some consumer electronic items have avoided the sanctions, perhaps in order to avoid hitting voters' wallets ahead of the mid-term elections.  Chinese slide rules will cost more in the States though, as well as flick knives and garden sheds. The plan is to increase the tax to 25% in the new year but, until that happens, the feeling in financial markets is that a 10% levy ought not to do too much damage.

The news has not been of much help to the US dollar though. It shared last place for the day with the Japanese yen and Canadian dollars, losing three quarters of a cent to sterling and half a cent to the euro. Although it strengthened immediately after the tariff announcement the dollar ran out of steam within two hours as investors wondered what form China's retaliation would take.

Still marking time

Sterling had another quiet day, its movements more a by-product of action in other currencies than driven by any UK news or data. On average it was unchanged against the other majors and it was flat against the euro, the Swiss franc and the antipodean dollars.

Investors remain optimistic that Britain will reach a post-Brexit trade agreement with Brussels before the European Council meets in November.  They see the prime minister exerting more control over the ultra-Brexiteers in her own party and expect her to cobble together an arrangement that will keep the UK economy rolling.

The Swedish krona was Monday's top performer, redeeming itself after coming last on Friday following lower-than-expected inflation readings. That slowdown in inflation seems not to have made the Riksbank any less inclined to tighten monetary policy around the end of the year.

Milk prices

It's a bad job when the most exciting item on the ecostat agenda is milk prices. But that is the case today: New Zealand's GDT dairy index, which does not even have a time attached to it, is just about the only statistic with the potential to affect exchange rates - specifically the NZ dollar.

Swedish unemployment, Italian industrial orders and sales, Canadian manufacturing shipments and America's NAHB housing do not have what it takes, unless one of them turns out to be wildly out of whack. Westpac's barometer of Australian consumer confidence might do it, but that does not appear until tonight.

European Central Bank president Mario Draghi will take to the podium this morning but even an appearance by him is unlikely to cause any ripples in financial markets. His speech will be to the Banque de France's Autorité de Contrôle Prudentiel et de Résolution. They don't do ripples.

USD lower after new Trump tariffs announced

USD lower after new Trump tariffs announced

CAD dragged down by the Greenback

CAD dragged down by the Greenback

JPY flat against sterling: no flight to safety

JPY flat against sterling: no flight to safety

GBP remains supported by Brexit deal optimism

GBP remains supported by Brexit deal optimism

SEK recovery driven by hawkish Riksbank minutes

SEK recovery driven by hawkish Riksbank minutes

NZD could be affected by GDT dairy index

NZD could be affected by GDT dairy index

EUR awaits appearance by ECB president

EUR awaits appearance by ECB president

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