Dollar and stocks drop as U.S-China trade deal remains uncertain

• The dollar and the global equity markets declined after the U.S
  President-Trump’s said U.S-China trade deal was still far from sight.
• Britain’s
  sovereign debt and escalating violence in Hong Kong caused Asian equities to
  report their worst day since August.
• The
  U.S. dollar, often a safe-haven asset during political and economic uncertainties,
  was lower against the yen and the Swiss franc.

On Monday, the dollar and the global equity markets dropped after the U.S President-Trump’s remarks over the weekend. His comments suggested that a trade deal with China was still far from sight, dashing the recent investor optimism.

Moody also warned Britain about its sovereign debt weighing down shares in London. Escalating violence in Hong Kong caused Asian equities to report their worst day since August, boosting demand for the safe-haven gold and yen.

The U.S. dollar, often a safe-haven asset during political and economic uncertainties, was lower against other traditional safe-havens – the yen and the Swiss franc.

The dollar index fell 0.15%, with the euro up 0.14% to $1.1032. The yen strengthened 0.12% versus the greenback at 109.11 per dollar. The dollar was 0.28% weaker against the franc at 0.9944 per dollar.

On Saturday, Trump said the U.S- China trade talks were moving along nicely, but slower than he would have liked. He also said there had been incorrect new reporting about Washington’s willingness to lift tariffs.

Last week, officials from China and Washington said the two countries had already agreed to roll back tariffs and were in the “phase one” trade deal.

The long-standing trade war between the two largest economies in the world had slowed global growth. Over the weekend, data showed that China’s producer prices dropped in more than three years in October- which underscored the impact of the trade war.

“It’s difficult to say who stands to lose more from this deal falling apart, but this last-minute jostling does not inspire confidence,” said Craig Erlang.

Craig Erlang is a senior market analyst at PANDA Corp.

“We swing from optimism to pessimism daily and never feel any the wiser,” He added.

Global stocks drop amid political and economic uncertainties

MSCI’s measure of global stocks shed 0.31%, while the FTSEurofirst 300 index of leading regional shares fell 0.04%.

On Wall Street, the Nasdaq Composite dropped 18.55 points or 0.22% to 8,456.76. The Dow Jones Industrial Average fell 107.78 points, or 0.39%, to 27,573.46. The S&P 500 lost 9.72 points, or 0.31% to 3,083.36.

Oil prices were mixed.

Brent crude rose 17 cents at $62.68 a barrel. The U.S. crude fell 2 cents to $57.22 a barrel.

A sell-off in southern European bond markets caught pace and pushed yields higher. The inconclusive election in Spain added to the uncertainty among debt investors.

Optimism over the U.S-China trade deal and improving economic data hurt government bond markets across the single-currency bloc.

U.S. Treasury markets closed for the Veterans Day holiday.