Global stocks have fallen after US President Donald Trump ramped up his tariff war against Canada, leaving Europe squarely in the firing line, sparking a modest investor push into safe havens such as gold, while bitcoin hit a new record high.
The Canadian dollar fell after Trump issued a letter late on Thursday that stated a 35 per cent tariff rate on all imports from Canada would apply from August 1, adding the European Union would receive a letter by Friday.
The US president, whose global wave of tariffs has upended businesses and policymaking, floated a blanket 15 per cent or 20 per cent tariff rate on other countries, a step up from the current 10 per cent baseline rate.
This week he surprised Brazil, which has a trade surplus with the United States, with duties of 50 per cent, and hit copper, pharmaceuticals and semiconductor chips.
Aside from pockets of volatility in target currencies, stocks or commodities, markets have offered little in the way of reaction to the onslaught, leaving the VIX volatility index at its lowest since late February.
In Europe, the STOXX 600, which has risen 2.2 per cent this week, fell 0.7 per cent in morning trade on Friday.
Futures on the S&P 500 and the Nasdaq fell 0.6 per cent, pointing to a retreat from this week’s record highs at the open later.
“The market is becoming a bit numb to these (tariff) announcements, and perhaps it’s not until we see hard data showing an impact that we (will) start to see the market reacting,” City Index strategist Fiona Cincotta said.
“Obviously, we’re getting more information through that does bring with it an element of clarity. Because there is so much uncertainty, there is still this idea that Trump could be open to negotiation, nothing feels ‘final’ still,” she said.
The dollar rose 0.3 per cent against the Canadian dollar to $C1.3695 .
The euro, which has lost nearly one per cent in value since the start of July, was/ down 0.2 per cent at $US1.1683.
Earlier in the week, Trump pushed back his tariff deadline of July 9 to August 1 for many trading partners to allow more time for negotiations, but broadened his trade war, setting new rates for a number of countries, including allies Japan and South Korea, along with a 50 per cent tariff on copper.
Wall Street indices posted record closing highs on Thursday as AI chip maker Nvidia made history, bagging a market valuation above $US4 trillion ($A6.1 trillion).
Gold rose for a third day in a row, up 0.6 per cent to $US3,342 an ounce, bringing gains for July so far to 1.2 per cent.
Treasuries got less of a safe-haven boost as investor concern about the fragility of long-term US government finances prompted a sell-off that pushed yields up.
Benchmark 10-year yields rose three basis points to 4.38 per cent, adding to Thursday’s rise on the back of data that showed jobless claims unexpectedly fell last week.
The yen, which also typically behaves like a safe haven, has been steadily weakening as the prospects dim for a US-Japan trade deal.
The dollar was up 0.4 per cent on Friday at 146.76 yen, set for a weekly gain of 1.6 per cent, the biggest of 2025.
Bitcoin jumped 3.8 per cent to $US117,880, the highest on record.
Oil prices fell, extending the previous day’s losses to leave Brent crude down nearly two per cent at $US68.88 a barrel.
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