Artjom Hatsaturjants, research analyst at Accendo Markets, said "market sentiment soured on President Trump criticizing the Fed for hiking rates and threatening to go "whole hog" on imposing tariffs on all $500 billion of Chinese imports to the US, further inflaming global trade tensions and putting at risk central bank independence".
Business Insider points to a report from Chinese publication Global Times claiming that Chinese textile manufacturers that produce Trump gear are having greater trouble getting their goods into the United States thanks to the current trade war between the USA and China. "Over two years, I'm more anxious about seeing eight than seven (yuan to the dollar)", he said, adding that the Chinese currency was already considered artificially strong. "Look, I'm not doing this for politics".
USA crude fell slightly to $68.24 a barrel after posting its third straight weekly loss.
It set a central point of 6.7671 per dollar, almost one percent lower than the previous day's. Smaller companies tend to do better than larger ones when trade tensions flare up because they do a greater proportion of their sales in the US.
"As a result, we reduce the size of our overweight in global equities". They argued that the taxes would raise auto prices, squeeze automakers by increasing the cost of imported components and invite retaliation from U.S. trading partners - and allies - like the European Union and Canada.More news: France responds following Rahul’s comments on Rafale deal
Looser policy tends to pressure a country's currency.
"Chasing USD/CNY higher is probably the wrong trade", Goldman Sachs Group Inc strategists including Zach Pandl in NY wrote in a note to clients Friday, referring to the dollar-yuan currency ticker. Market participants attributed the currency's slight rebound to suspected intervention by state authorities.
China's yuan continued its steady decline on Friday, defying US President Donald Trump's warning over the dollar's rise and providing Beijing with a buffer against punitive trade tariffs imposed by Washington.
In the CNBC interview broadcast Friday, Trump reiterated his claim that the United States is "being taken advantage of" on issues including trade policy. The Russell 2000 index of smaller-company stocks gained 0.6 per cent to 1,701.31.
European markets were not immune to the jitters. The Nasdaq composite gave up 5.10 points, or 0.1 percent, to 7,820.20.More news: Israel Passes Contested Law That Defines It as a 'Jewish State'
Nigeria's central bank asked lenders on Friday to submit bids for the Chinese yuan, traders said, in the first auction after it agreed a $2.5-billion (R33.56-billion) swap with its Chinese counterpart in May.
The Wall Street Journal noted that Mr Trump's comments had an immediate impact on global markets, sending the stocks lower.
Meanwhile, political concerns in Italy returned, hitting government bonds and stocks.
Previous threats drew a more pronounced response, albeit that Trump's latest threat was just that, and not an official announcement. "It's not helpful that these parties are packed with euro sceptics". Germany's 10-year yield rose four basis points to 0.37 percent. Brent crude, used to price worldwide oils, gained 30 cents to at USD72.88.
Brent crude pared an early 0.9 percent gain to be up 0.2 percent by 1145 GMT at $72.69 per barrel.More news: Guardiola admits Man City missed out on ‘an exceptional player’ in Jorginho