The euro reached a five-month high on Wednesday. Ukraine’s readiness to accept a month-long ceasefire boosted the euro. Stocks whipsawed due to fluctuating U.S. tariff plans. Concern about a U.S. economic slowdown also impacted stocks.
European equity futures jumped 0.8%. The U.S. said it would restore military aid and intelligence sharing to Ukraine, causing FTSE futures to rise 0.3%. Kyiv stated they would accept a U.S. ceasefire proposal.
Russia has yet to respond.
The euro hit its highest level since October in New York trade, reaching $1.0947. It remained steady at $1.0913 in the Asia session. Russia’s rouble rose to a seven-month high overnight.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.2%. Markets in Hong Kong and China remained broadly steady. Japan’s Nikkei held its ground after slumping to a near six-month low the previous day.
On Wall Street overnight, the S&P 500 flirted with a 10% fall from February’s record closing high. It finished a volatile session about 0.8% lower.
President Donald Trump threatened to double steel and aluminium tariffs on Canada to 50%. He then backed down. Ontario suspended plans for a surcharge on exported electricity, leading to the change.
The dollar has sunk. Treasuries have rallied. Stocks have suffered their heaviest selling in months recently. Traders worry that tariffs and policy uncertainty will hurt U.S. growth.
“He’s clearly trying to rebalance the economy back in favour of America,” said Catriona Burns. She is the lead portfolio manager of a global fund at Wilson Asset Management in Australia.
“In this interim bit at the start, where he’s going hard, it’s a very dynamic environment to be operating in,” she said.
U.S. stocks added to the biggest selloff in months on Tuesday.
“The uncertainty that the tariffs and the back-and-forth on them is creating is hindering decision making,” they said. “…so the effect that has in terms of a short-term pocket for the U.S. and an impact on growth there will be really interesting.”
Travel stocks took a beating. Delta Air Lines cut its profit forecast in half. Rivals United and American Airlines warned of deteriorating results. They cited falling government bookings and uncertainty weighing on demand.
Investors felt nervous about the economy and punished downbeat financial results from retailers. Dick’s Sporting Goods stock dove 5.7% on a dour outlook. Kohl’s Corp shares plummeted 24% after reporting a drop in sales.
Steel and aluminium tariffs take effect later in the day.
U.S. inflation data for February is also due. It is likely to be too early to show much of a tariff hit.
A central bank meeting in Canada will be closely watched. People want to see what monetary policymakers on the front line of Trump’s trade war are thinking. A seventh consecutive rate cut is priced into the market. The market saw this as only an even chance two weeks ago.
The Canadian dollar hit a one-week low overnight. It then recovered to C$1.443 per dollar. U.S. equity futures were broadly steady.
The yen inched down from a five-month high. It traded around 148 per dollar. The risk-sensitive Australian dollar was pinned just below 63 U.S. cents. Brent crude futures were held just under $70 a barrel.
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