The euro was trading near five-month highs today on Ukraine's readiness to accept a month-long ceasefire, while stocks whipsawed on back-and-forth US tariff plans as levies on steel and aluminium imports kicked in.
Russian Foreign Minister Sergei Lavrov said in an interview published today, speaking in the context of a possible Ukraine peace deal, that Moscow will avoid compromises that would jeopardise people's lives, Russian agencies reported.
The euro hit its highest since October yesterday at $1.0947 and was steady at $1.0913 in Asia trade today. Russia's rouble rose to a seven-month high on the previous day.
US steel and aluminium tariffs of 25% took effect today - with fairly muted effect on the share prices of Asian steel mills - and drew counter-tariffs from Europe.
US President Donald Trump threatened then backed down from a doubling of steel and aluminium tariffs on Canada to 50%, after Ontario suspended plans for a surcharge on exported electricity.
The dollar has sunk, Treasuries have rallied and lately stocks have suffered their heaviest selling in months as traders worry tariffs and policy uncertainty will hurt US growth.
"Where we stand now is with a heightened concern about the US economy, not having yet taken our model forecast down, but having put in a roughly 40% recession risk into the outlook for the year," JP Morgan chief global economist Bruce Kasman said.
"If the US goes into recession, then we enter into a more complicated story, because then you have to recognise that US spillovers to the rest of the world tend to be very large through financial channels," he said.
Investors nervous about the economy punished downbeat financial results from retailers, with Dick's Sporting Goods stock diving 5.7% on a dour outlook and Kohl's shares plummeting 24% after reporting a drop in sales.
Travel stocks also took a beating after Delta Air Lines cut its profit forecast in half and rivals United and American Airlines warned of deteriorating results, falling government bookings and uncertainty weighing on demand.
US inflation data for February is due later today, though it is likely to be too early to show much of a tariff hit.
A central bank meeting in Canada will be closely watched to see what monetary policymakers on the front line of Trump's trade war are thinking. A seventh consecutive rate cut - seen as only an even chance two weeks ago - is priced into the market.
The Canadian dollar hit a one-week low overnight before recovering to C$1.445 per dollar.
The yen inched down from a five-month high to trade around 148 per dollar. The risk-sensitive Australian dollar was pinned just below 63 US cents and Brent crude futures were held just under $70 a barrel.
