SINGAPORE- The dollar slid broadly on Thursday and the euro firmed after President Donald Trump announced harsher-than-expected tariffs against US trading partners, jolting the markets as investors sought safe havens such as the yen and Swiss franc.
The highly anticipated tariff announcement sent shockwaves through markets, with global stocks sinking and investors scrambling to the safety of bonds as well as gold.
Trump said he would impose a 10 percent baseline tariff on all imports to the United States and higher duties on some of the country’s biggest trading partners. The tariffs will take effect on April 9 and appeared to target about 60 countries.
The new levies ratchet up a trade war that Trump kicked off on his return to the White House, rattling markets as fears grow that a full-blown trade war could trigger a sharp global economic slowdown and fuel inflation.
Trump has already imposed tariffs on aluminum, steel and autos, and has increased duties on all goods from China.
“Eye-watering tariffs on a country-by-country basis scream ‘negotiation tactic’, which will keep markets on edge for the foreseeable future,” said Adam Hetts, global head of multi-asset and portfolio manager at Janus Henderson Investors.
“We’ve seen the administration have a surprisingly high tolerance for market pain, now the big question is how much tolerance it has for true economic pain as negotiations unfold.”
The risk-sensitive Australian dollar fell 0.49 percent to $0.62685, while the New Zealand dollar slipped 0.2 percent to $0.5733.
The yen strengthened to a three-week high against the dollar and was last up 1.3 percent at 147.39 per dollar, while the Swiss franc touched its strongest level in four months at 0.8754 per dollar.
