Just like ‘Clash of Titans’, USA and China are on the verge of a full-scale trade war. Thanks to President Donald Trump for the declaration and China for raising the tariffs on American goods worth of $75 billion. No wonder US will retaliate and they increase the tariffs on Chinese goods from 25% to 30%.
This tariff warfare generates enough tension and hesitation among investors, especially in FOREX trading. To save their fortune, the investors are gathering around safer currencies like Japanese Yen, Euro, or Turkish Lira.
Throughout the last few years, Yen remains as the best-performing currency in the FOREX trading market. It not only offers a high yield but also safety net against downside risks among this trade tension between the two superpowers.
The yen was its three-years high on this week after recovering from the plunge in January. Currently it is 105.755 against US dollar with a 0.3% up. Moreover, Yen maintained a consistent growth against the dollar throughout this year. The increase was around 3.5%.
Both US treasury yield and Chinese offshore Yuan is showing signs of regression amid the trade tension. US treasury yields plummet from 1.5182% to 1.5030% showing a sign of imminent recession. Additionally, the Chinese currency plunged to its record low against the US dollar at a rate of 7.1694.
The steady growth of Yen and crash of both US and Chinese currencies are making the FOREX investors consider a transition to safe-haven currencies.