Forex Today: Trump’s China tariffs trigger a sell-off, EU ones coming, and Non-Farm Payrolls eagerly awaited

Here is what you need to know on Friday, August 2nd:
– US President Donald Trump has announced a tariff  of 10% on around $300 billion of Chinese goods – the remaining ones which have not endured levies so far. Trump said that negotiations are not moving fast enough and that his Chinese counterpart Xi Jinping has broken his promises to buy Chinese agricultural goods.  
– The safe-haven yen and bonds found fresh demand while stocks, oil, and commodity currencies tumbled. Some suspect that Trump’s move – one day after the Federal Reserve tied its rate cut to trade tensions – is not coincidental and meant to put pressure on the Fed to rates again.
– The White House is set to make an announcement regarding tariffs on EU products at 17:45 GMT. A punishment of Airbus and retaliatory tariffs are on the cards. EUR/USD has stabilized, taking advantage of falling US yields.
– Trade tensions between Japan and South Korea have been escalating as Tokyo eyes removing Seoul from a list of “trusted partners.”
– US Non-Farm Payrolls are of high-interest today but will compete for attention with the trade wars. The US is expected to have gained 170K jobs – back to normal after several volatile months. Wage growth will likely grab more attention due to the Fed’s focus on inflation.  Weak ISM Manufacturing PMI has marginally dampened expectations and weighed on the USD.
– GBP/USD has been under some pressure after Boris Johnson’s Conservative Party lost a seat in parliament in a by-election. The majority of one makes policy-making challenging. Earlier, sterling remained stable after the Bank of England left its policy unchanged and continued assuming a smooth Brexit. The BOE repeated its intent to raise rates.  Markit’s Construction PMI is of interest today.