Markets

Stocks waver, dollar slips as traders shrug off trade talk

Stocks waver, dollar slips as traders shrug off trade talk

In a market wrap, analysts at Westpac explained that US President Trump launched fresh salvos in the US-China trade war and again criticised the Fed, and the G20 summit highlighted trade tensions - noting that the US dollar fell and US bond yields rose.

The comments also signalled an undiminished appetite for battle on multiple fronts after a week dominated by coverage of the fallout from his dealings with Russian President Vladimir Putin.

The outbursts were another crosswind for Wall Street, which struggled to find direction and finished the day a hair's breadth in negative territory.

The U.S. dollar weakened the most since March while the loonie surged, U.S. Treasuries tumbled and stocks closed mostly lower after President Donald Trump's latest verbal salvos fanned investor concern that a global trade war is escalating.

Last month, the Fed raised its benchmark rate for a 2nd time this year and projected 2 more increases in Y 2018. Soybeans were the United States' biggest agricultural export to China, worth $12 billion past year. His follow-up comments this afternoon have accelerated this decline as traders made a decision to take profits on their USA dollar long positions ahead of the weekend. Chinese imports from the US totaled $205 billion in the first five months of 2018, with the deficit reaching $152 billion.

The administration to date has slapped tariffs on $34 billion of Chinese goods in a trade dispute over what it calls the There is already pushback in the US from businesses that will take a hit in an escalating trade war. nation's predatory practices. The president has already imposed tariffs on $34 billion in Chinese goods, and Beijing has retaliated with tariffs on an equal amount of American exports.

Several of the more than 20 governors attending the annual meeting of the National Governors Association said shifting USA trade policies are rattling markets for agricultural commodities and complicating decisions by foreign investors.

However, most economists warn that the imposition of import tariffs could disrupt global manufacturing supply chains, raise input costs and raise prices for consumers, leading to slower economic growth.

Trump, in part of an interview aired by United States television network CNBC, broke with the long-established executive branch practice of not commenting on the Fed's decisions out of respect for its independence.

"I'm not thrilled", Trump told the network in an interview excerpt aired yesterday. "He doesn't want to move, and they've offered the US absolutely...no options regarding the issue of [intellectual property] theft and forced technology transfer". The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals.

The comments, plus Trump's criticism of Federal Reserve interest rate hikes, had sent the dollar tumbling against a basket of currencies.

However, his administration appears "determined to push down the value of the USA dollar", says Markets.com, in order to help United States companies compete overseas, a key plank of Trump's attempt to make trade "fairer". The yuan may be a key tool in China's response to Trump, who continues to express dissatisfaction with America's own monetary policy as his country's currency strengthens. "I want them to do well", the USA president said of China.

The US dollar, meanwhile, continued its decline against the euro and pound.


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