Asian stocks ease, dollar near two-week lows on Trump comments

Asian stocks ease, dollar near two-week lows on Trump comments

Donald Trump accused China of unfair competition, pointing to the 375 billion United States dollars trade deficit that the USA reported past year in its commodity exchange with the Asian giant.

China and the United States have been involved in an escalating trade dispute since Washington imposed 25 per cent and 10 per cent tariffs on steel and aluminium in March, which have been extended to include an array of other Chinese goods.

Meanwhile, the Euro and the Sterling benefited from weaker Greenback as both rose against the U.S. Dollar to finish the session in the green territory at 1.17212 EURUSD and 1.31305 GBPUSD respectively.

He again said he was willing to ramp up his attacks on China, potentially imposing punitive tariffs on all of the USD505.6 billion in goods imported from that nation.

But investors and traders attribute some of the gains to the Trump administration's tax cuts which are widening the fiscal deficit, leading to more government borrowing, and the imposition of import tariffs against China, Europe, Mexico and Canada which may contribute to inflation. China promptly levied taxes on the same value of US products.

Reactions in financial markets were widespread, as US Dollar related assets pinballed in line with the greenback.

But many analysts are skeptical that Trump's tactics will produce such an outcome.

Beijing said it does not intend to devalue the yuan to help exports.

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"That isn't how trade negotiations work, " Yerxa said.

Dollars index fell against the basket of six major currencies to close Friday's trading session in the red at 94.41 after Trump said that a higher interest rate would pressure the competitive advantage of the U.S. Economy. China also said it would reduce its auto tariffs from 25 percent to 15 percent. "They've received conflicting messages depending on who they speak with".

The Fed has raised rates twice this year and is expected to raise rates a couple more times by year end which may attract more foreign into the U.S. dollar with monetary policy remaining loose in Europe and Japan, analysts said. Yet any such agreement would require extensive talks over how it would be implemented and verified.

The dollar traded mixed, while bitcoin went back above $8,000 to reach the highest level since May.

Asian stocks are seeing some hesitation at the new week's outset, recoiling at the possibility of further trade action to come from the United State's President Trump.

"I really only see this as a short-term outcome", said Issa. He has been denouncing other countries' trade practices and urging retaliation for decades, dating to the 1980s, when Japan was regarded as America's main global economic threat.

"You're sitting right in the dead of summer", he said.

"If it does, it does, " he said.