Trump gripes on forex weigh on dollar, stoke 'currency war' fears

US dollar down on as Trump makes fresh threats vs China

US stocks inched lower Friday as bond yields jumped, a shift that helped banks but hurt companies that pay big dividends.

Emerging markets (EM) in Asia are most vulnerable to an escalation in US-China trade tensions, particularly, Taiwan, Malaysia, Korea, and Singapore along with China itself. Trump followed-up this comment on Friday by tweeting, "The United States should not be penalized because we are doing so well".

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.

The dollar fell after President Donald Trump said China is manipulating its currency. Those Chinese practices include cyber-theft and an insistence that American and other foreign companies hand over technology in exchange for access to the Chinese market.

Given the smaller size of China's U.S. imports (US$155 billion in 2017), retaliatory action - should it occur - might include larger tariffs but could also include a variety of non-tariff measures including guiding state-owned enterprises away from USA products and services. In response, Beijing vowed "firm and forceful measures". But in the CNBC interview, the president said he was seeking to do only what's fair.

"I'm not doing this for politics, I'm doing this to do the right thing for our country", the president said.

Ironically, this plays into China's short term strategy as a de-valued Yuan will help China to equalise tariffs in its trade with the USA thus making numerous new protectionist barriers essentially toothless against American businesses and consumers buying these "de-valued" goods with an increasingly strong Dollar.

United States imported goods worth $505.5 billion from China in 2017, against exports of $129.9 billion to that country, showing a trade deficit of $375.6 billion, data from the Census.

The yuan's fall provides "a significant offset to the loss in export competitiveness for Chinese exporters due to higher U.S. tariffs", Rajiv Biswas, chief Asia economist with IHS Markit, told AFP. However, such a maneuver risks reigniting an outflow of capital that Beijing has spent months trying to halt.

Before inauguration, Trump reportedly saw evidence Putin personally ordered election interference
The president's tumultuous trip across Europe, historians say, smashed the conventions of American leaders on the world stage. Trump was asked at the end of a Cabinet meeting Wednesday if Russian Federation was still targeting the U.S.

"Chasing USD/CNY higher is probably the wrong trade", Goldman Sachs Group Inc strategists including Zach Pandl in NY wrote in a note to clients Friday, referring to the dollar-yuan currency ticker. On Thursday, it surprised investors by guiding the yuan lower.

The administration says it wants China to end the theft of intellectual property from USA companies and curb policies that require American and other foreign businesses to hand over technology in exchange for access to the Chinese market.

The dispute between the world's two largest economies stems from accusations that China steals technology from USA companies or forces them to hand over technology to Chinese companies as well as differences over the US trade deficit with China.

The U.S. government put tariffs on imported steel, aluminum, washing machines and solar panels this year and is considering taxing auto imports.

Trump has also threatened further tariffs on $200 billion in Chinese goods.

"Automobiles - that's the 800-pound gorilla", Brookings' Dollar said.

He wasn't finished there either, as in a tweet storm he then blasted China and the European Union for manipulating their currencies lower in order to gain a competitive advantage.

He had told CNBC that he was "not thrilled" that the US central bank is raising interest rates as the economy improves, and in his tweet repeated his claim that the Fed is undoing the economic progress the country has seen during his presidency. "Tightening now hurts all that we have done". The bank has raised rates twice this year and two more times before the end of the year.

Related news:

Hot News

isis-killer-beheading-video-story-top At least 10, including a child, shot in Toronto: Canadian media
Jul 23, 2018 - 09:46
I am thankful to all first responders who came as quickly as possible to help people in the wake of this horrific incident. NowMedia will provide more information as the situation progresses. "The gun violence in Toronto is insane ".

isis-killer-beheading-video-story-top Guardiola opens up on Man City attempts to sign Chelsea's Jorginho
Jul 21, 2018 - 13:59
Mahrez, who is one of City's most high profile transfers so far this summer, will be joined in the starting line-up by goalkeeper Joe Hart .

isis-killer-beheading-video-story-top Jerusalem BLASTS TARGETS in Gaza After 'Shooting Incident — ISRAEL UNLEASHED
Jul 21, 2018 - 13:26
The protests are partly meant to draw attention to the Israeli-Egyptian blockade imposed after Hamas took control of Gaza in 2007. At least two projectiles were launched and intercepted by the Iron Dome system and another fell in an open field, the army said.

isis-killer-beheading-video-story-top U.S. Court Denies Trump Ex-Campaign Chief's Request To Relocate Trial
Jul 21, 2018 - 12:28
Former Trump campaign manager Paul Manafort is shown in this booking photo in Alexanderia, Virginia, U.S., July 12, 2018. The filing also asks the judge to keep the motions under seal to protect the identities of the potential witnesses.

isis-killer-beheading-video-story-top Iran Files Suit against U.S. for Violating 1955 Treaty of Amity
Jul 19, 2018 - 11:26
New details have emerged of how the Israeli spy agency Mossad smuggled out Iranian nuclear documents earlier this year. Sanger and Israeli investigative journalist Ronen Bergman, the writer of the 2008 book "The Secret War With Iran".

isis-killer-beheading-video-story-top Trump condemned over Putin summit
Jul 19, 2018 - 10:53
And it has been interfering in the elections of former Soviet bloc countries such as Latvia for almost three decades. Trump's remarks at the news conference brought swift condemnation from Democrats and Republicans alike.

isis-killer-beheading-video-story-top Trump, Putin Lead Press Conference After 2-Hour Meeting
Jul 19, 2018 - 10:18
A man argues with a security staff on a protest poster prior to a press conference after the meeting of U.S. According to Trump, he was "Very strong on the fact that we can't have meddling, we can't have any of that".

isis-killer-beheading-video-story-top Former U.S. Ambassador To Russia Opposed to Joint Interference Investigation
Jul 19, 2018 - 08:48
It shows frankly the outrageousness and the just desire to find the negative in everything that this President does, she said. Sanders also addressed how the administration is working to prevent Russian meddling in US elections in the future.

isis-killer-beheading-video-story-top Raptors Have Positive Initial Conversation With Kawhi Leonard
Jul 19, 2018 - 08:36
Two years later, the Indiana Pacers selected Kawhi Leonard 15th overall and immediately traded him to the San Antonio Spurs . Plus, the Lakers didn't have the sort of assets the Spurs would have wanted for an elite player like Leonard.

isis-killer-beheading-video-story-top Zinedine Zidane could be set for reunion with Cristiano Ronaldo at Juventus
Jul 18, 2018 - 11:17
Ronaldo takes on his usual No.7 shirt at the expense of Colombian global Juan Cuadrado, who is now in need of a new shirt number. I thank the supporters with all my heart, but I have to focus on this new challenge. "I'm so proud of being here".

isis-killer-beheading-video-story-top LeBron James Hugged It Out with Tyronn Lue at NBA Summer League
Jul 18, 2018 - 10:56
The Lakers entered Tuesday's Las Vegas Summer League championship game as the tournament's No. 1 seed with a flawless 6-0 record. The only other veteran on the summer league first team was Milwaukee Bucks forward Christian Wood.

isis-killer-beheading-video-story-top Liverpool bid for Roma keeper Alisson
Jul 18, 2018 - 10:52
Chelsea's interest depends on Thibaut Courtois' future, while Real Madrid have made the Belgian their main target. Roma goalkeeper Alisson has picked Liverpool as his preferred destination ahead of Chelsea , according to reports.

isis-killer-beheading-video-story-top Tesla shares fall after CEO Musk abuses British caver
Jul 18, 2018 - 10:47
The submarine , I believe, was about five-foot-six long, rigid, so it wouldn't have gone round corners or round any obstacles. The British diver reportedly helped recruit top global cave rescue experts for the mission as well.

isis-killer-beheading-video-story-top Cher to release album of Abba covers after 'Mamma Mia!'
Jul 18, 2018 - 10:24
Through a series of flashbacks, Sophie learns more about her mother's past and each of the love stories that drove the first film. When the film Mamma Mia! came out ten years ago, I was sniffy.

isis-killer-beheading-video-story-top France claims victory in 2018 World Cup
Jul 18, 2018 - 08:48
The Croatian President, Kolinda Grabar-Kitarovic, is a learned woman who fills in the entire criteria of being a president. Mario Mandzukic of Croatia scores an own goal to put France in front. "We hope to overcome all the difficulties", he said.