Dollar Increases & Stocks Decline Due to Trump’s Tariff Threat – Asia Market Wrap
The Dollar rose and stocks fell as Trump indicated the US would slap extra tariffs on China, Mexico, and Canada, raising concerns about his ‘America First’ policy.
Most Asian markets fell, and European futures pointed to a negative beginning after Trump announced an additional 10% duty on Chinese goods and a 25% tariff on all exports from Mexico and Canada. He stated that the steps were necessary to prevent migrants and illegal drugs from crossing the US border.
China’s offshore Yuan fell 0.4%, while the Mexican peso and Canadian dollar each fell more than 1%. Share indexes in Japan, Australia, and South Korea all fell, while S&P 500 Index futures fell 0.5% before reversing.
Chinese stocks also fell but beat the majority of their regional counterparts, with the CSI 300 Index down only 0.1%. Chinese equities may have been supported by dip buying following a two-day fall, as well as anticipation that Beijing may increase fiscal easing to sustain economic development in the face of escalating geopolitical concerns.
Gold was little changed after initially plunging following Trump’s remarks. Bullion was trading near $2,630 per ounce, down 3.4% on Monday as Middle-East tensions eased. Oil rose, while copper fell.
