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As trade uncertainty persists, Asian stocks are rising and the dollar is fluctuating.

The dollar weakened as U.S. tariffs on steel and aluminum increased, and Asian stocks rose. This marks the latest chapter of the trade war which has roiled the markets throughout the year.

Investors have been focused on the pace and lack of progress in trade negotiations. The deadline for U.S. trade partners to submit proposals for deals in order to avoid Trump's "Liberation Day", hefty tariffs, is Wednesday.

The European Stock Futures market pointed to an opening higher as the European Central Bank began its two-day meeting, where it was expected to reduce rates on Thursday.

South Korea's currency and stocks surged in Asia after the liberal candidate for president Lee Jae Myung won his election. This victory raised expectations of a rapid economic stimulus and market reforms, as well as easing policy uncertainties.

The benchmark KOSPI rose more than 2%, reaching its highest level since August 2024. The MSCI broadest Asia-Pacific share index outside Japan was nearly 1% higher.

Japan's Nikkei gained 0.8% while Taiwanese stocks rose 2%, after artificial intelligence giant Nvidia helped boost U.S. stock prices on Tuesday.

The data showed that U.S. jobs opened up in April but that layoffs also increased, which indicates a slower labour market due to tariffs impacting the economy outlook.

Investors have been watching a potential phone call between U.S. president Donald Trump and Chinese leader Xi Jinping this week, as tensions simmer between the two world's largest economies.

Trump accused China on Friday of violating the Geneva Agreement to reduce tariffs and trade barriers. Beijing has said that it will protect its interests, and that this accusation is unfounded.

The blue chip index in China rose by 0.58% on Wednesday, while Hong Kong’s Hang Seng index rose by 0.56%.

The Trump-Xi negotiations remain the focus of attention, even though markets may have become numb to headlines about trade. "A grand deal seems unlikely, but any escalation may still cause a bout risk aversion", said Charu Chanana. Chief investment strategist at Saxo, Singapore.

Trump also signed an executive order that will take effect on Wednesday the surprise announcement he made last week, that he would increase tariffs for steel and aluminum imports from 25% to 50%.

Thierry Wizman is a global FX & Rates Strategist at Macquarie. He said: "We think that the steel & aluminum tariffs are a good example of other strategic tariffs which are likely to'stick.'" "With this, there is still little incentive for a U.S. Dollar rally to take root."

DOLLAR WEAKNESS

Investors have fled U.S. assets in search of safe havens this year, including gold, as they anticipate trade uncertainty to have a negative impact on the global economy.

The Organisation for Economic Cooperation and Development (OECD) has revised its March estimates, due primarily to the impact of the Trump administration’s trade war.

The dollar rose 0.18% against the yen on Wednesday to 144.225. The euro was unchanged at $1.1368.

The dollar index (which measures the U.S. currency against six major currencies) was 99.31 on Monday, not too far away from the six-weeks low of 98.58 that was reached on Monday. The index has fallen 8.5% in the past year.

Oil prices fell in commodities due to a loosening of the supply-demand equilibrium following an increase in OPEC+ production and lingering worries about global economic prospects because of tariff tensions.

Brent crude futures fell 0.38%, to $65.38 per barrel. U.S. West Texas Intermediate crude crude dropped 0.41%, to $63.15 a barrel.

Gold's gains this year have been staggering, reaching 28%, thanks to safe-haven flows.

(source: Reuters)