China has launched a World Trade Organisation challenge against Washington's proposal to slap $50 billion in tariffs on Chinese imports over Beijing's alleged theft of intellectual property and technology, documents published today have shown. 

In the text released by the WTO, China's delegation requested "consultations" with Washington "concerning the proposed tariffs (and) measures that the United States accords to certain goods in various sectors including machinery, electronics, etc. originating in China."

A "request for consultations" is the first step in a full blown legal challenge at the WTO's Dispute Settlement Body. 

Global stock markets and the US dollar have today risen to a two-week high as investors reassessed the danger of a trade war between China and the United States.

Investors have kept an eye out for any wider fallout from a Sino-US trade dispute, after Beijing yesterday proposed tariffs on US imports including soybeans, planes, cars, beef and chemicals.

The yen, often sought in times of market turmoil and political tensions, had rallied as US shares tumbled yesterday after China imposed retaliatory tariffs on US goods.

But a comeback by US equities helped the dollar recoup some losses after President Donald Trump's economic adviser said the administration was negotiating with China, not engaging in a trade war.

European markets all ended Thursday with 2-3% gains, while leading US indices were ahead by as much as 1%.

"A trade war may now be the number one risk for investors after China's retaliation to US tariffs, but [it] will have to heat up to spill over into the currency arena," said Viraj Patel, a currency strategist at ING in London.

"FX markets have taken on the role of a casual observer... changes in global FX volatility have been pretty much in line with historical averages."

Traders are divided other whether the row will affect the dollar meaningfully and, if it does, whether it will help or harm the currency.

The dollar has weakened in three of the last five sessions against the yen, down more than 5% so far this year.

Against the Swiss franc, it has fallen 1.4% so far in 2018. The yen and franc tend to appreciate during geopolitical and economic tension.

The dollar rose 0.2% against a basket of six major currencies to 90.32 as risk appetite improved and Wall Street's main indexes advanced, helping the US currency stabilise after recent declines.

"It's too early to say whether the markets have moved beyond trade conflict woes. The situation is still very fluid, and currencies, like dollar/yen, will remain hostage to each turn in equities," said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.