Markets Tense on Renewed Trade Conflict
The U.S. dollar index was down just after noon on Tuesday as traders continued to worry about the trade tensions between the United States and China and if/how things will resolve in the coming days.
Last week, both U.S. and Chinese officials hinted that a trade deal was near, and markets reacted to the news positively. Nevertheless, over the weekend U.S. President Donald Trump made inflammatory statements, committing to raising tariffs on Chinese products from 10 percent to 25 percent if China doesn’t kowtow to his demands. Trump and his aides have accused China of reneging on their prior commitments and have blamed China’s move for the need to implement new sanctions. The call for more tariffs, released by Trump via twitter, sent global markets broadly lower on Monday, and extended concerns into Tuesday despite new reports that Chinese Vice Premier Liu He will arrive in Washington for trade talks this week, contradicting earlier predictions that he would back out.
The dollar index was down 0.10 percent as of 12:49 p.m. HK/SIN, with the greenback trading down against most of its primary trading partners. The British pound gained 0.22 percent against the dollar to trade at $1.3124, and the euro was 0.13 percent higher, to $1.1213. The dollar also eased against the yen, trading down 0.11 percent to 110.64.
Stock Market Movements
Asian stock markets were searching for direction on Tuesday after suffering steep losses on Monday. The Nikkei 225, open today after being closed for over a week for the emperor’s coronation, was down 1.53 percent in the early afternoon. South Korea’s Kospi was down 1.08 percent. China’s benchmark indexes managed to squeeze out some gains after falling over 5 percent yesterday. The Shanghai Composite was up 0.32 percent and the Shenzhen Composite was up 1.47 percent. Hong Kong’s Hang Seng Index also started to climb back from yesterday’s losses, gaining 0.16 percent by the early afternoon.