Asian shares started the week in the red, faltering for the eighth straight day while the dollar climbed as U.S. President Donald Trump raised the stakes in the heated trade dispute with China. Beijing has warned of retaliation if Washington launches any new measures, but it is running out of room to match them dollar-for-dollar, raising concerns it could resort to other measures such as weakening the yuan or taking action against U.S. companies in China. The impact of tariffs and high levels of uncertainty will both continue to weigh on markets into the end of the year. Chinese trade data released on Saturday could give Trump more reason to turn up the heat. China’s trade surplus with the United States widened to a record in August. Trump, who is challenging China, Mexico, Canada and the European Union on trade issues, has now expressed displeasure about his country’s large trade deficit with Japan.
In currencies the dollar edged higher against a basket of currencies thanks to strong U.S. August jobs data and amid fears of a potentially major escalation in the China-U.S. trade conflict. EURUSD held at 1.1550 after two straight sessions of losses while USDJPY traded in a narrow range, changing hands at 110.96. GBPUSD hold above 1.2900 ahead of the GDP and manufacturing production. Brexit chatter will be key for the Pound, with mixed reports seeing the Pound on the choppier side.
In commodities, Oil prices rose on Monday as U.S. drilling for new production stalled and as the market eyed tighter conditions once Washington’s sanctions against Iran’s crude exports kick in from November, after straight days of losses, with U.S. crude futures up 44 cents at $68.19 per barrel. Brent crude futures added 48 cents to $77.31 a barrel.
Gold was mostly unchanged at $1,194.84 earlier retracing from last week’s gains.