Euro gains on growing fears of China-U.S. trade war escalation

Euro gains on growing fears of China-U.S. trade war escalation

10 May 2019 04:49 PM
 

The euro edged higher on Friday on growing fears that any escalation in the trade conflict between the United States and China would force U.S. policymakers to cut interest rates.

U.S. President Donald Trump's tariff increase to 25% from 10% on $200 billion of Chinese goods kicked in on Friday, and Beijing said it would strike back. The two sides are pursuing last-ditch talks to try to salvage a trade deal.

While U.S. and Chinese officials return to the negotiating table later on Friday, investors have quietly ratcheted up bets of a U.S. interest rate cut with markets now roughly expecting one rate hike by the end of 2019.

The single currency edged 0.1% higher to $1.1230 on Friday.

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