Trump added Canada to the list of recalcitrant Countries, announcing a blanket 35% tariff on all exports to the USA, which seemed to dispel the markets TACO theory. This followed the letters sent to many Asian Countries and others, announcing allocated tariffs margins, commencing August 1st. This was enough to take equity markets lower and bond yields higher. The EUR dropped back to 1.1670, anticipating their own letter from Trump, while the GBP tumbled below 1.3500.The resurgent reserve did little to impact commodity currencies, which have been boosted by US tariffs on copper. Australian mining companies surged, along with the price of copper, adding upward momentum to the currency. The AUD surged toward 0.6600, while the NZD looks to regain 0.6000. This coming week will be dominated by escalating trade wars, which may spread to Europe and Australasia. Over the weekend Trump has added the EU and Mexico to the sanction list, with a 30% tariff, commencing August 1st. This will unsettle markets when they open today.
