Arnaud Masset
Swissquote Bank Ltd
Asian equities fell across the board on Wednesday after Donald Trump announced tariffs on a further $200bn in imports from China. The Nikkei 225 gave up 1.19% to 21,932 points, while Chinese stocks bore the brunt of the sell-off. The Shanghai Composite fell 1.76%, while the tech-heavy Shenzhen Composite slid 1.96%. European equities followed the lead and moved in negative territory. The German DAX already gave up more than 1%, the Eurostoxx 50 fell 0.85% while the SMI erased 1%.
The Trump administration unveiled a new list - which includes a broad range of products ranging from electric vehicle batteries to air conditioning machines - of Chinese products that will be hit with a 10% tariff. The list is not definitive yet and is expected to come into effect in September. China already declared the new tariff were “totally unacceptable” and promised it will retaliate dollar-for-dollar.
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In the FX market, the announcement triggered a risk-off reaction, which translated into a sell-off in emerging market currencies, and a broad US dollar appreciation. Safe-haven currencies such as the Swiss franc and the Japanese saw limited but were at least able to hold ground. In the EM complex, the Russian ruble and the Turkish lira suffered the most as they both fell 0.50%. The Chinese yuan slid 0.48% with USD/CNH rising to 6.6815. Finally, the currencies of export-oriented countries also felt the pain. The Australian dollar fell the most within the G10 complex as it erased 0.65% to $0.7410.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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