Asian stocks showed muted movement while the euro strengthened on Monday after US President Donald Trump delayed threatened 50% tariffs on EU goods, extending trade negotiations until 9 July, Reuters reported.
The last-minute reprieve—announced after European Commission President Ursula von der Leyen requested more time to “reach a good deal”—provided temporary relief to markets still rattled by Trump’s unpredictable trade policies.
The euro rose 0.35% to $1.1404, its highest since late April, as risk-sensitive Antipodean currencies also gained. The dollar index hit a one-month low, with OCBC strategist Christopher Wong noting:
It still is largely a ‘sell dollar story’… The policy unpredictability surrounding Trump’s tariffs and of course, the erosion of the US exceptionalism, this could potentially still undermine sentiment and the confidence in the medium term.
Equities were mixed, as MSCI’s Asia-Pacific ex-Japan index dipped 0.07% while Japan’s Nikkei rose, buoyed by Nippon Steel’s 2.3% jump after Trump backed its $14.9bn bid for US Steel.
Meanwhile, China’s blue-chip index fell 0.7%, with Apple suppliers hit by Trump’s threat of 25% iPhone tariffs. European futures pointed to a 1.5% higher open.
While the tariff delay eased immediate fears, Commerzbank warned Trump’s “unpredictable and seemingly incoherent policies” continue to unnerve investors. Analysts note capital is shifting from the US to Europe and Asia amid recession risks, exacerbated by Moody’s recent US credit downgrade and weak debt auctions in developed economies.
