The rise of the Chinese economy, according to analysts – on the basis of non-existent consistent trading and investment rules – is causing both the US and European economies to decline. This means that China benefits from existing technology, production and sales of goods, including service delivery, regardless of copyright. “I think we need rules more than ever,” said Anthony Gardner, former US ambassador to the EU. On April 25, 2019, at 7:34 CET, the EUR/USD currency pair traded at US$1.1151 per EUR with a daily decrease in EUR of – 0.01% against the USD.
According to analysts and economic rapporteurs, the stronger decline in the single European currency is largely caused by the negative German investor sentiment. Furthermore, the strongest economy of the European Union, the German economy, which accounts for about a quarter of the European Union’s total GDP, is in dispute with the US on building a 5G mobile data network. Germany did not, according to the White House security experts in Washington, forbid the possibility of building this network in Germany in cooperation with the Chinese company Huawei. This topic of using Huawei technology is still open in other European countries, including the Czech Republic, and is causing not only economic but also political disruption.
What is causing the euro to become more volatile and also the Euro-to-Dollar Rate decline below US$1.12 against EUR, is not only the impact of Chinese technology and the US political and security ideas for Europe, but also increased investor nervousness with respect to the forthcoming European Parliament elections. The persistent situation with Brexit also plays a significant role in the decline in the euro exchange rate. So far, the Prime Minister of Great Britain, Theresa May, has failed to find room for a consensus in the lower house of the British Parliament so that a mutual agreement between Britain and the EU on the departure of the United Kingdom from the European Union can be approved and adopted.
On this basis, in the beginning of this week the British pound (GBP) also saw a decline against the USD and the GBP/USD traded below US$1.30 per GBP. On April 25, 2019, at 7:58 CET the GBP/USD currency pair traded on the Forex market at a rate of US$1.2905 per GBP with GBP strengthening by 0,04 % against the USD. At the same time the EUR/GBP currency pair traded at a rate of GBP 0.8642 per EUR, following the balanced trade trend for both currencies.
According to analysts and financial strategists in the upcoming period, with regard to the medium and long term investment horizons, the growing Chinese economy’s impact on the global financial world is to be expected. “The world should accept the ascendancy of China, embrace it, make sure we minimize some of its more outrageous behavior, but at the same time integrate China into a new world order in which it plays a great role,” said Ho Kwon Ping, founder of hospitality group Banyan Tree Holdings. Other investment bankers subsequently agreed on similar conclusions at a seminar in Singapore organized by the Swiss bank Credit Suisse.