Trump's Trade Turmoil: Market Jitters and Global Economic Impact
Asian stock markets remained stable and the euro rallied following President Trump's delay of tariffs on European goods, extending the deadline by over a month. Market sentiment improved after last month's sell-off, yet Trump's unpredictable trade policies continue to influence investor behavior and currency fluctuations.
Stock markets across Asia showed stability on Monday while the euro witnessed an uptick as US President Donald Trump extended his tariff threat on European goods by over a month. This unexpected postponement offered a temporary respite amid Trump's inconsistent trade policy decisions. Trump's decision postpones the new trade deadline to July 9, as European Commission President Ursula von der Leyen requested more time to secure a beneficial agreement.
The markets were recovering from a significant selloff, provoked by Trump's earlier tariff pauses, as investors sought new trade agreements after Britain's pact and a provisional deal with China. However, the volatility in Trump's policies remains a stark reminder for investors, who are now shifting their investments from the US to Europe and Asia, factoring in the potential for a US recession and a subsequent global downturn.
Currency markets reacted with the euro appreciating to $1.1404, its peak since April 29, and risk-sensitive currencies from Australia and New Zealand also rose. Meanwhile, the dollar index touched its lowest point since April 22, supporting the ongoing 'Sell America' sentiment. Market activity was curtailed by public holidays in the US and UK, while in Japan, the Nikkei index rose mainly due to Trump endorsing Nippon Steel's bid for US Steel.
(With inputs from agencies.)
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