Dollar Surges, Stocks Plunge as Trump Unleashes Trade Tariffs
Key Points
* US dollar surges 1%, poised for largest gain since COVID-19 pandemic.
* European and US stock futures plunge on news of punitive tariffs.
* Tariffs targeted at Canada, Mexico, China, and potentially the eurozone.
* Fears of price pressures trigger rise in US Treasury yields.
* Global markets anticipate significant impact from protectionist measures.
Market Impact
* Euro approaches parity with US dollar amid threats of EU tariffs.
* Bitcoin tumbles, crude oil gains, industrial metals decline.
* Traders brace for volatility in assets exposed to trade war.
* Canadian dollar weakens to its lowest since 2003.
* Emerging market currencies, including Indian rupee and Mexican peso, post losses.
Reactions and Countermeasures
* Canada imposes 25% counter-tariffs.
* Mexico pledges retaliatory levies.
* China vows "corresponding countermeasures" and plans to file WTO complaint.
* Automakers and electric vehicle manufacturers face potential supply chain disruptions.
Economic Implications
* Tariffs expected to fuel inflationary pressures and keep US interest rates elevated.
* Foreign economies seen as more vulnerable than the US.
* North American oil market at risk of disruption, potentially raising gasoline prices.
Additional Market Movements
* S&P 500 futures down 1.8%
* Nasdaq 100 futures down 2.3%
* MSCI Asia Pacific Index down 2.6%
* Bitcoin down 2.6%
* 10-year US Treasury yield unchanged at 4.54%
* Brent crude rises 1.3% to $76.66 a barrel