US Dollar, Stock Markets Rally After US-China 10% Tariff Truce
Global financial markets surged Monday following a surprise 90-day tariff truce between the United States and China.
Source: Getty Images
Following the joint statement, the Wall Street posted its biggest single-day gains in over a year and the U.S. dollar strengthened sharply against major currencies.
US-China tariff truce
The breakthrough deal, reached during tense trade talks in Geneva, saw both sides slash steep import duties in a bid to de-escalate growing economic tensions.
The U.S. agreed to reduce tariffs on Chinese goods from 145% to 30%, while China cut its duties on American imports from 125% to just 10%.
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The market reaction was swift and bullish. The S&P 500 jumped 3.3%, while the tech-heavy Nasdaq soared 4.4% as investor sentiment rebounded from last month’s slump triggered by the tariffs.
The U.S. dollar rose 2% against the Japanese yen, while traditional safe-haven assets like gold and the Swiss franc saw steep declines as risk appetite returned for the US dollar.
In currency markets, the euro weakened by 1.4%, while oil prices gained nearly 2% as traders priced in reduced recession risk and potential increases in demand tied to improved trade flows between the US and China.
Whether this truce becomes the foundation of a new trade framework or simply a short-lived market sugar high will depend largely on the next steps taken by President Donald Trump and Chinese President Xi Jinping.
Source: TUKO.co.ke
