Global shares rallied, while gold and safe-haven currencies slumped against a resurgent dollar on Monday as the US and China agreed to temporarily slash harsh “reciprocal” tariffs and cooperate to avoid rupturing the global economy.
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Following weekend talks in Geneva, both sides agreed that the US would drop levies on Chinese imports from 145 per cent to 30 per cent during a 90-day negotiation period and China would cut duties from 125 per cent to 10 per cent.
Wall Street stocks were set for significant daily gains, with the S&P 500 index rising 2.9 per cent in early trades and the tech-focused Nasdaq Composite advancing by 4 per cent.
In a joint statement on Monday, Washington and Beijing said they recognised the importance of their bilateral trade relationship to both countries and the global economy, in language that analysts widely said had brightened the market outlook.
An index tracking the dollar against other major currencies rose further from last month’s three-year trough with an almost 1.1 per cent gain, while Japan’s yen fell 2 per cent to 148.2 per dollar.
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The retreat from haven assets pushed Switzerland’s franc 1.6 per cent lower on the day, in a jolt of relief for Swiss exporters and the nation’s central bank.