Home » Currency Note » Currency Note » Currency Note USD » USD: America attacks China over trade practices again

Yesterday, a new report was published, in which the US Trade Representative, Robert Lighthizer, said that China hasn’t changed its ‘unfair’ and ‘unreasonable’ practices. There is a G20 meeting with world leaders later this month, so the comments will likely increase tensions in the run-up to the meeting. It is widely expected that Trump and Xi will discuss the issue, but whether a deal can be brokered looks unlikely at present.

The US is currently on track to post the largest ever trade deficit with China in 2018, which would appear to rubbish claims that Trump’s policies are working. The gap was $375 billion last year, but is on course to exceed this figure before the year is out. In the first nine months of 2017, the trade deficit with China was $274.2 billion, with this year’s figure showing a deficit of $301.4 billion in the first nine months.

A mass of US economic data was released on the eve of Thanksgiving, with US home sales rising by 1.4% in October to end a six-month run of declines. However, the annual rate is still lower than the same month last year. Durable goods orders dropped by a whopping 4.4% last month, which is the biggest drop since July 2017. However, this is mainly because of weaker demand for aircraft which is often a volatile factor.

Initial jobless claims up to 17 November 2018 increased to 224,000 from 216,000 and higher than the 215,000 the markets had been expecting. While this is the highest figure for four months, it is still evidence of a strong job economy. Finally, the University of Michigan’s consumer sentiment index dropped to 97.5 in November from 98.6 the previous month. It is the lowest reading for three months.

There are no economic data releases on the schedule today, as Americans will be celebrating Thanksgiving, but tomorrow sees the composite, manufacturing and services PMI for November. All are expected to hold steady or improve slightly.

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