The US Dollar is higher but remains close to a 14-month trough versus the Japanese Yen. Once again, it is turmoil in the Trump White House that is to blame for the geopolitical uncertainty in the United States and has effectively ratcheted up worries of a global trade war. Analysts say that Donald Trump took a decidedly protectionist stance when he said that he would impose tariffs on imports of aluminum and steel, and the resignation of Gary Cohn, Trump’s economic advisor, suggests to analysts that the tariff threat might not have been a one off move but rather the first shot in the beginning of a trade war.

As reported at 11:42 am (GMT) in London, the USD/JPY was trading at 105.655 Yen, a gain of 0.04%; earlier, the pair had hit a trough of 105.458 Yen while the peak is a distant 106.190 Yen. The AUD/USD is trading higher at $0.7815 while the NZD/USD is down 0.1166% and trading at $0.7284. The USD/CAD is trading at C$1.29273, a gain of 0.02708%.

Trade War Casualties

Analysts say that a trade war could result in a broadly lower US Dollar initially as markets examine the US deficit more closely for its inherent structural weakness. Later, as the trade war escalates, emerging markets currencies would also begin to suffer.