World stocks, dollar nudge higher on U.S. autos tariff relief

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LONDON, April 29 (Reuters) – World stocks and the dollar edged up on Tuesday after U.S. President Donald Trump’s administration said it planned to reduce the impact of auto tariffs, a further sign of flexibility on a trade policy that has wreaked havoc on markets in April.

Market focus was also turning to the early signs of the impact tariff pain is having from economic data and the latest company earnings.

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Canada’s dollar dipped against a broadly-firm U.S. currency as Canadian Prime Minister Mark Carney’s Liberals retained power in Monday’s election, but fell short of the majority government he had wanted to help him negotiate tariffs with Trump.

The United States said it would move to reduce the impact of duties imposed on foreign parts in domestically manufactured cars, and keep tariffs on vehicles made abroad from stacking up on other duties, officials said.

“There is a focus on the tariff news getting less worse but there’s also a focus on hard data and whether the market is right to worry about a recession,” said State Street Global Markets’ head of macro strategy Michael Metcalfe.

First-quarter U.S. GDP and April jobs figures are due out this week.

TRADE

Markets were rattled overnight when U.S. Treasury Secretary Scott Bessent told CNBC it was “up to China to de-escalate” tariffs and there are growing worries that unless there is a breakthrough, permanent damage will be wrought on supply chains.

“A true de-escalation (in the U.S.-China trade war) is some time away, in our view,” Sat Duhra, portfolio manager at Janus Henderson, told the Reuters Global Markets Forum on Tuesday.

“Someone will blink first, and it is likely to be led by the market as we have seen in the U.S.”

JP Morgan analysts said the clock was ticking on hard data resilience, highlighting a 42% peak-to-trough slump in China shipments to the U.S. in the past 10 days, which – if sustained – would reverberate through supply chains.

“A worrying decoupling of U.S.-China trade … now looks to be underway, and we expect the damage to build in coming weeks and months.”

DOLLAR FIRMS

The dollar rose against other major currencies, adding 0.25% to 142.38 yen . The euro dipped 0.12% to $1.1408, while sterling was down about 0.2% to $1.3417 ,
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Still, the euro is up 5% in April, set for its largest monthly rise on the dollar in nearly three years, while the greenback’s 6.7% drop on the safe-haven Swiss franc is the largest in a decade.

Canada’s dollar traded at around 1.3821 per U.S. dollar , little changed on the day, following Monday’s Canadian election.

“A thin parliament lead is hardly positive news for a country’s currency, but Canadian dollar losses have been quite limited in size,” ING analysts said in a note.

The stronger dollar set gold back 0.6% to $3,320 an ounce. Brent crude was 1.4% weaker at $65 a barrel.

Treasury yields edged up in London trade, rising 2.5 basis points to 4.245 .

Reporting by Dhara Ranasinghe in London and Tom Westbrook in Singapore; additional reporting by Ankika Biswas in Bengaluru; Editing by Saad Sayeed

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