Global Markets React to Escalating US-Canada Trade Tensions
Investors seek safe havens amid escalating trade tensions between the US and Canada.
SYDNEY/LONDON: Global stocks experienced a downturn on Friday as US President Donald Trump intensified his tariff war against Canada, raising concerns about potential repercussions for European markets.
This development led to a modest shift towards safer assets like gold, while Bitcoin surged to new record highs.The Canadian dollar depreciated following an announcement from Trump late on Thursday stating that a 35 percent tariff would be imposed on all imports from Canada beginning August 1.
Additionally, Trump notified the European Union that they could expect a similar letter by Friday, further escalating the situation.Trump has been implementing tariffs at higher rates than previously anticipated for various countries, including Brazil, which has a trade surplus with the US.
The increased tariff rates have affected copper, pharmaceuticals, and semiconductor chips among other goods.Despite pockets of volatility in target currencies, stocks, and commodities, global markets have shown limited reaction to the ongoing tariff announcements.
This relative calm could be attributed to the belief that Trump may still be open to negotiations, leading to continued uncertainty.The dollar experienced a 0.3 percent appreciation against the Canadian dollar, strengthening to $1.3695.
The euro faced a nearly 1 percent decline in value since July began and depreciated by 0.2 percent on Friday, reaching $1.1683.Market experts suggest that while investors are becoming desensitized to tariff announcements, there is still uncertainty surrounding the outcomes of these trade tensions.
The potential for negotiations remains a possibility, contributing to the lack of conclusive reactions from markets.The gold market saw an increase of 0.6 percent, marking the third consecutive day of gains and bringing July's total gain to 1.2 percent.
However, the demand for Treasuries as a safe-haven asset was limited due to concerns over the long-term US government finances, resulting in a slight selloff.Benchmark 10-year yields rose by 3 basis points to 4.38 percent, building on Thursday's increase following data indicating a decline in jobless claims last week.
The yen weakened as the prospects for a US-Japan trade deal dimmed, leading to a 0.4 percent appreciation of the dollar against the Japanese yen.Bitcoin saw significant gains of 3.8 percent, reaching an all-time high of $117,880.Next week's corporate earnings reports, particularly those from JPMorgan Chase, are expected to provide insights into the impact of Trump's tariffs implemented since April 2 on various companies.
This development led to a modest shift towards safer assets like gold, while Bitcoin surged to new record highs.The Canadian dollar depreciated following an announcement from Trump late on Thursday stating that a 35 percent tariff would be imposed on all imports from Canada beginning August 1.
Additionally, Trump notified the European Union that they could expect a similar letter by Friday, further escalating the situation.Trump has been implementing tariffs at higher rates than previously anticipated for various countries, including Brazil, which has a trade surplus with the US.
The increased tariff rates have affected copper, pharmaceuticals, and semiconductor chips among other goods.Despite pockets of volatility in target currencies, stocks, and commodities, global markets have shown limited reaction to the ongoing tariff announcements.
This relative calm could be attributed to the belief that Trump may still be open to negotiations, leading to continued uncertainty.The dollar experienced a 0.3 percent appreciation against the Canadian dollar, strengthening to $1.3695.
The euro faced a nearly 1 percent decline in value since July began and depreciated by 0.2 percent on Friday, reaching $1.1683.Market experts suggest that while investors are becoming desensitized to tariff announcements, there is still uncertainty surrounding the outcomes of these trade tensions.
The potential for negotiations remains a possibility, contributing to the lack of conclusive reactions from markets.The gold market saw an increase of 0.6 percent, marking the third consecutive day of gains and bringing July's total gain to 1.2 percent.
However, the demand for Treasuries as a safe-haven asset was limited due to concerns over the long-term US government finances, resulting in a slight selloff.Benchmark 10-year yields rose by 3 basis points to 4.38 percent, building on Thursday's increase following data indicating a decline in jobless claims last week.
The yen weakened as the prospects for a US-Japan trade deal dimmed, leading to a 0.4 percent appreciation of the dollar against the Japanese yen.Bitcoin saw significant gains of 3.8 percent, reaching an all-time high of $117,880.Next week's corporate earnings reports, particularly those from JPMorgan Chase, are expected to provide insights into the impact of Trump's tariffs implemented since April 2 on various companies.
