The Reserve Bank raised its expectations of interest rate as the dollar fell

Global trade tensions and fears of a trade war between the United States and China led to losses in the US dollar against other major currencies in Monday’s trading session. At the same time, expectations that the Federal Reserve will raise interest rates at its next meeting in September increased.

Despite the upbeat economic data released in the US, especially Friday’s jobs report, the US currency surprised markets by falling against rival currencies, raising expectations that the US Federal Reserve will raise interest rates at its 25-26 September meeting.

The dollar index, which measures the strength of the dollar against a range of major currencies, fell 0.35% to trade at 95.07 points.

Trade tensions between the United States and China escalated when US President Donald Trump threatened to introduce new customs duties on Chinese imports worth $267 billion, as well as previous promises of tax tariffs on Chinese goods worth $200 billion.

On Monday, Beijing’s foreign ministry said that it would retaliate if Washington carried out its trade threats. “If the U.S. side obstinately clings to its course and takes any new tariff measures against China, then the Chinese side will inevitably take countermeasures to resolutely protect our legitimate rights,” said a spokesman for the Chinese Foreign Ministry.

The dollar rose against the Japanese yen, which is considered a safe haven for investors as it is a safe asset during uncertainties in the markets. The USD/JPY rose 0.08% to trade at 111.11 Yen for the US Dollar.

The Euro rose against the greenback by 0.46%, to trade at 1.1604. The British pound was also up against the greenback at 0.82%, with GBP / USD trading at $1.3019 per pound. This comes after the EU Commission said that the issue of Britain’s exit from the EU will become a reality within the next 8 weeks.

The Australian dollar rose against the US dollar by 0.24% to trade at 0.7123 US dollars per Australian dollar. Meanwhile, the New Zealand dollar rose against the US dollar by 0.13%, with the pair reaching 0.6541 US dollars to the New Zealand dollar.