USDCHF Heads Lower on US Trade War Escalation

USDCHF Heads Lower on US Trade War Escalation

USDCHF Heads Lower on US Trade War Escalation

Stocks are slumping again Friday afternoon as fears of an escalating trade conflict between the US and China rattled investors around the world.

President Donald Trump announced on Thursday that he plans to impose tariffs on roughly $50 billion in Chinese imports.

- US Trade sanctions on Chinese imports will bring retaliatory measures. Trump said he was taking those steps in response to theft of American technology. That depends on whether President Donald Trump will settle for a reduction in China's USA trade surplus or hold out for sweeping changes to China's industrial policies. The list is expected to be published within two weeks, then subject to a 30-day comment period and potential revisions by the U.S. Trade Representative's office after that period ends.

In times like these, with trade tensions threatening all-out war, investors run to gold.

Investors kept buying bonds, sending prices higher and yields lower.

Banks also took steep losses as interest rates decreased.

The fear rippled into Asia, where shares tumbled in early trading. Japan's Nikkei 225 plummeted 4.5%, and the Hang Seng in Hong Kong lost 2.5%. Chinese steel futures shed more than 6 percent to their lowest in more than eight months, while iron ore slumped to levels unseen in almost nine months.

In response to President Donald Trump's tariff hike on steel and aluminum, China unveiled a list of USA goods including pork, apples and steel pipe that it may hit with higher import duties.

"There could be a possibility of a bounce back if, as this progresses, both sides look like they're negotiating", said Lisa Erickson, chief investment officer at U.S. Bank Wealth Management.

Kin of 39 Indians killed in Iraq mourn
After the confirmation of the 39 Indian workers killed by ISIS in Iraq's Mosul, the nation is hit by the storm of grief. Among the dead, 31 belong to Punjab, 4 to Himachal Pradesh while the remaining four belong to Bihar and West Bengal.

"Markets are looking immensely fragile today".

European Union leaders yesterday said they would maintain a threat to hit the U.S. with counter-measures, such as taxes on bourbon, Levis jeans and Harley Davidson motorbikes.

On Thursday, markets sank. The S&P 500 fell 55.43 points, or 2.1%, to 2,588.26. The Nasdaq composite fell 174.01 points, or 2.4%, to 6,992.67.

The market also considered economic reports released Friday.

The Dow dropped more than 700 points Thursday, its worst loss since early February, as investors anxious the dispute could escalate and could slow down global economic growth and company profits. Shares in Shanghai closed down 3.4 percent. The stochastic indicator is signalling that the market is in extreme oversold territory, so the next move lower may be delayed for now.

"Instead of a trade war with the United States, Europe now faces the threat of a trade war with China", Felbermayr said in a statement.

USA media has speculated that China could also choose to impose tariffs on soybean imports from the USA, which amount to about 30 million tons a year.

Global investors have been spooked by Donald Trump's confirmation of tariffs of up to $60bn on imports from China.

Earlier this month the Trump administration ordered tariffs on imported steel and aluminum, and stocks dropped as investors anxious about the possibility of tougher restrictions on global trade and smaller profits for corporations.

Related news