Early on Friday, Reuters quoted the Fed research paper claiming that the Trump administration’s dispute with China means hundreds of billions of dollars in lost U.S. output and as much as $850 billion lost globally through early next year.
The news report also mentions the increase in markets’ uncertainty, from the research paper, which recently shot up to levels last seen in 1970s and could result in 1% drop in the US and global gross domestic product (GDP). This sum up to $850 billion loss to global GDP.
FX implications
While such news fails to have any direct immediate impact on the markets, it highlights the importance of the underlying issue, here it is the US-China trade war, and can help determine possible market moves in a case of any fresh news concerning the same.
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