The dollar index which measures the greenback against a basket of major currencies faltered at a two-year high of 98.94 and tumbled to 97.88. The renewed trade tensions between China and the United States raised the chances of an interest rate cut by the Federal Reserve in September meeting to 83%. Last week, the Federal Reserve lowered interest rates by 0.25% for the first time since the financial crisis in 2008, citing increased downside risks to the economy. The US 10-year yields dropped to 1.745%, the lowest since November 2016, the USJPY tumbled to 105.80, and the EURUSD inched higher to $1.1130 erasing post FOMC meeting losses.
Major US stock-index futures extended losses weighed down by the fresh trade tensions. The trade war between China and the United States intensified as Trump announced new tariffs on Chinese products starting in September. The Dow Jones Industrial Average futures tumbled to a six-week low of 26130, the S&P500 futures dropped to 2896, and the Nasdaq futures plunged to 7572.
Gold prices soared as investors rushed to safe-haven assets as trade tensions escalated. The price of a gold ounce climbed to a fresh six-year high of $1460, and the price of a silver ounce rose to $16.55. Meanwhile, palladium crashed to $1384.
Oil prices erased partial losses but remain under heavy pressure as trade tensions bumped the global economic outlook. The renewed fears of a full-blown trade war between the world's largest economies weighed on oil prices. Oil benchmarks resumed the move down where the West Texas Intermediate crude futures dropped to $54.84, and Brent futures dipped to $60.87.