The currency market is looking at some currencies that are likely to be affected by trade wars. When the market is concerned about the effect of tariffs on steel and aluminum imports by the administration of US President Donald Trump and the possibility of retaliation by China, the financial markets appear to have been largely unaffected.
Today, the G20 finance ministers will meet. The currency market is waiting for whether the diplomacy of these countries can solve the problem between the US and other countries. Currencies are typically strongly affected by trade policies.
For example, when President Barack Obama's administration raised Chinese steel import tariffs in May 2016, the dollar index fell more than 2% in a month. So too when President George Bush raised tariffs on steel imports for the European Union in March 2002. The dollar fell 6% in three months.