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Stocks and Chinese yuan cave in on Trump’s China tariff threat

Stocks and Chinese yuan cave in on Trump’s China tariff threat
US President Donald Trump’s renewed attack on Beijing over the coronavirus crisis has sunk the Chinese national currency, the yuan, to a one month-low, while global markets also dipped lower.

The yuan fell by 0.7 percent in morning trading on Friday, before crawling back up to 7.0632, but was still down versus the dollar. 

Bourses in Hong Kong and Shanghai, as well as some other markets is Asia, were closed for a holiday on Friday. The Japanese market was one of the few that was open, with its benchmark Nikkei index finishing the trading day nearly three percent lower. Meanwhile, Australian shares faced their worst losses in weeks, falling nearly five percent. 

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While most European markets are closed for Labor Day, shares trading on the London Stock Exchange opened lower on Friday, with Britain’s FTSE 100 extending Thursday’s losses and dropping around two percent.

The market decline came on the heels of Trump’s threat to unleash new tariffs against China. On Thursday, the US president, who has long been accusing Beijing of concealing information on the coronavirus outbreak, said his administration plans retaliatory measures over the pandemic. The US remains the worst-affected country in terms of the number of confirmed infections. Trump also played down the importance of the trade deal with China. 

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As tensions between the two biggest economies escalate Wall Street is also expected to fall when it opens later in the day. All the three major US indices were pointing lower in pre-market trading, signaling that they could extend the earlier losses that came on the heels of grim US jobless data. The Dow Jones Industrial Average shed 288 points on Thursday as the total number of first-time filings for unemployment insurance surpassed 30 million over the past six weeks.

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