On Monday, the 6th of May 2019, the US currency witnessed a marginal flash crash against Japanese Yen, sinking to a five-week low minutes after Japanese Market had again started trading after a 9-day-long holiday. Besides, the American dollar also witnessed a plunge against other major currencies, after US President Donald Trump had fanned the flames of a hibernating Sino-US trade war, saying that he would be hiking the tariffs on Chinese exports worth of $200 billion this week.
Apart from that, the US President had also added that the Unites States would no longer tolerate an escalation of trade deficit with China and he might impose additional tariffs on separate Chinese imports worth of hundreds of billions, until China bowed down to US calls for financial structural reforms on Chinese economy.
‘ However, followed by Trump’s contentious comments, who had narrated an entirely opposite painting of Sino-US trade talk on last Friday (May 3rd) saying that the trade talks were making progresses, a Wall Street Journal report had revealed that the Chinese team of negotiators led by Vice Premiere Liu He might cancel the latest round of trade talk in light of Trump’s threat.
An escalating geopolitical worry had appeared to be casting shadows over the FX market, as demands of safe-haven currencies such as Swiss Franc and Japanese Yen had surged dramatically on Monday (May 6th). The American dollar had managed to close the up by 0.2 percent to 110.88 yen after falling to a five-week low at 110.29 Yen at the early Asian trading hours, and another safe-haven currency Swiss Franc had closed the day up by 0.12 percent to 1.0177 franc against the US currency.
Meanwhile, sterling fell by 0.6 percent to $1.3101 over controversial Brexit headlines. While the US Dollar index, measured against a basket of six major currencies on an average, remained little changed to 97.527, a majority of emerging market currencies had dwindled on Monday (May 6th) market against a softening American dollar including Chinese Yuan, Mexican Peso and Turkish Lira.