The dollar tumbled with most stocks while gold hit a fresh record high as panic gripped markets again on Friday, while China retaliated against Donald Trump’s latest tariff blitz against the world’s number two economy.
The US president’s decision to delay crippling duties for 90 days sparked a frenzied scramble for equities that had been beaten down since his “Liberation Day” announcement unleashed a global panic.
However, the realisation that nothing had been resolved, coupled with Trump’s decision to double down on his battle with economic superpower China, fuelled another bout of selling of US assets.
The dollar tanked against the yen, euro, pound and Swiss franc — investors dropping what is usually considered a key safe haven currency as they look to unload US risk assets.
Gold-standard Treasuries were also under pressure amid speculation that China was offloading some of its vast holdings in retaliation for Trump’s measures.
The weaker dollar and the rush for safety has also sent bullion to a fresh record high above $3,220.
Chinese President Xi Jinping urged the European Union on Friday to join Beijing in resisting “unilateral bullying” by Washington, state media said as he met Spanish Prime Minister Pedro Sanchez.
Shortly after, Beijing said it would ramp up levies against the United States to 125 percent, compared with the 145 percent China faces.
It added that Washington’s moves defied “basic economic laws and common sense” and “seriously violates international trade rules” but said it would “ignore” future US hikes.
After blockbuster rallies on Thursday in response to the 90-day tariff pause, markets across the region were back deep in negative territory at the end of a highly volatile week.
Tokyo shed three percent — a day after surging more than nine percent — while Sydney, Seoul, Singapore, Wellington and Bangkok were also in the red.
However, Hong Kong and Shanghai rose as traders focused on possible Chinese stimulus measures. Beijing said earlier Friday it would implement a moderately loose monetary policy in a bid to reassure investors.
London and Paris rose in the morning but Frankfurt reversed early gains.
There were gains in Taipei and Ho Chi Minh City stocks as the leaders of Taiwan and Vietnam said they would hold talks with Trump. Manila, Mumbai and Jakarta also rose.
The generally downbeat mood came after losses on Wall Street, where the S&P 500 lost 3.5 percent, the Dow 2.5 percent and the Nasdaq 4.3 percent. That ate into the previous day’s gains of 9.5 percent, 7.9 percent and 12.2 percent respectively.
