Overnight, financial markets all around the world fell due to increasing pressure and concern surrounding the US-China trade dispute.
Should the dispute mount into a full-blown currency war, it is expected that there will be detrimental consequences for the world’s largest economies.
Carnage on Wall Street surfaced as the Dow Jones Industrial Average plunged by 2.9% – its worst trading day of the year. Meanwhile, both the S&P 500 and Nasdaq fell 3% and 3.4% respectively.
London-listed shares on the FTSE 100 also suffered by almost 2.5%, following deep losses on Asian markets.
And the bad news sailed right through to the Asian markets, with Australia’s ASX200 down 2%, the Nikkei down 0.7%, and the Hang Seng off 0.7%.
Washington attacked Beijing by claiming it was using currency manipulation and unfair trading practices in an escalating trade dispute, fuelling the fire even further. The US’ claim has only encouraged further chaotic selling across the global financial markets.
In a rampage on Twitter, President Trump said:
China is intent on continuing to receive
the hundredsof billions of dollars they have been taking from the US with unfair trade practices and currency manipulation. So one-sided it should have been stopped many years ago!
Trump’s attack on China was in response to Beijing’s decision yesterday to allow the yuan to drop below a level it had previously defended and therefore devalue against the dollar.
Following yesterday’s news, traders woke to Asian shares plummeting to a six-month low. According to the International Monetary Fund, the world economy now faces a decline in global economic growth as the countries up the ante in the standoff.
For the first time in 11 years, the People’s Bank of China (PBOC)
The sell-side action had started last week after Trump threatened to dramatically increase import tariffs on $300 billion of Chinese imports.
Chinese goods would therefore become more competitive for overseas buyers, as a weaker yuan could help Beijing compensate for the impact of the US tariffs.
Trump continued his rage on Twitter by saying that China was paying for the taxes that are paid by US importers of Chinese goods to US customs.
It is now even more obvious to everyone that Americans are not paying for the Tariffs – they are being paid for compliments of China, and the U.S. is taking in tens of Billions of Dollars!
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