Fundamental Comment

Trade war worries dominate investors’ vibes after Cohn resignation

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Investors continued to damp risky assets and resort to safe havens on Wednesday on worries of global trade war after the resignation of President Trump’s top economic advisor.

Gary Cohn, a key advocate for free trade in the White House, announced his resignation, thereby adding to fears Trump would go ahead with his planned tariffs.

Investors remained nervous this week amid trade war concern that sparked on Friday after Trump announced plans to impose tariffs of 25% on imported steel and 10% on aluminum.

Global shares and dollar dropped while investors flocked to refuge assets such as Japanese yen and Swiss franc.  

The USDJPY resumed its drop for a second straight session to 105.65, after hitting a bottom at 105.45, where 105 level remains key support to the pair.

The euro plummeted against the franc to 1.1630, erasing some of the gains generated over the previous two sessions.

Gold failed to continue its overnight gains, as it retreated to $1332.46 an ounce after facing selling near the session’s high at $1340.50.

The dollar index traded lower at 89.50, extending its fall from a seven-week top of 90.87 recorded on March 1.

Later in the day, the U.S. ADP non-farm employment report may signal a pace of job creation of 199,000 last month.

Eyes will focus on monetary decisions by the BOC, BOJ and ECB and the famous U.S. non-farm payrolls due on Friday.

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