Signs that the Bank of Japan could scale back its monetary stimulus faster than expected sent tremors through bond markets on Monday, while European stocks slid as threats of further USA tariffs on China drained risk appetite.
The dollar had reached that high after Federal Reserve Chairman Jerome Powell expressed confidence in the USA economy and affirmed expectations that the central bank was on track to keep hiking interest rates gradually.
"The reason we are not up more is the push and pull that has been the case for the past two months", said Walter Todd, chief investment officer at Greenwood Capital in Greenwood, South Carolina. Earlier this year, he invoked national security as a justification for taxing imported steel and aluminum.
Europe's STOXX 600 fell 0.3 percent as investors braced for a packed week of corporate earnings in Europe and a meeting between European Commissioner Jean-Claude Juncker and Trump to discuss threatened auto tariffs which could damage carmakers. The price of soybeans has fallen 50% since 5 years before the Election.
"They're making money easy and their currency is falling", Trump said on "Squawk Box".
MR CUI TIANKAI, China's Ambassador to the United States, on the growing trade dispute. The U.K.'s FTSE 100 Index was little changed.
Beijing has remained unusually quiet over US President Donald Trump's latest threat of imposing tariffs on, essentially, all Chinese imports. It expects that 700,000 jobs would be lost.
The Wall Street Journal noted that Mr Trump's comments had an immediate impact on global markets, sending the stocks lower.
China has been cracking down on excessive debt in its financial system but policy-watchers now expect Beijing to shift toward looser monetary policy, and potentially stimulus, to shield its economy from the trade row. On Friday, the Dow Jones industrial closed down slightly.
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Trump tweeted on Friday: "China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollar gets stronger and stronger with each passing day - taking away our big competitive edge". Emefiele said the three-year deal would help increase trade and reduce pressure on the naira-dollar exchange rate by weaning Nigerian importers off the greenback.
But many analysts are skeptical that President Trump's tactics will produce such an outcome.
Donald Trump likes to tweet about stocks, approval ratings and unfair trade practices, among other things.
"That isn't how trade negotiations work", Yerxa said.
China will likely retaliate if additional tariffs are imposed, economists note, rather than simply knuckle under. But he expressed bafflement at the "madness of Trump's method": If the president really wanted to put pressure on China, why would he tear up the Trans-Pacific Partnership and pick fights with virtually all America's allies and other trade partners at the same time?
Philip Levy, a trade expert at the Chicago Council on Global Affairs and a former White House trade adviser, suggested that Chinese officials have been frustrated and confused by their previous failed efforts to reach an agreement.
The silence in Beijing is unusual, but comes after Chinese media were told not to "over-report" the trade war, to avoid spreading panic.
Yet President Trump soon intensified his tariff threats anyway.
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