Dollar dives on Trump’s new trade threat

President Donald Trump gestures to the crowd as he departs after welcoming the 2025 College Football National Champions, the Ohio State University football team, during an event on the South Lawn of the White House in Washington. He has rattled markets anew following threats of higher tariffs on trade partners. (AP Photo/Manuel Balce Ceneta)

NEW YORK, United States – The dollar plunged on Thursday after US President Donald Trump threatened higher unilateral tariffs on trade partners, and oil see-sawed as traders evaluated the probability behind reports that Israel could be gearing up to strike Iran.

Stocks traded mixed as investors navigated the double whammy of returning trade uncertainty and geopolitical volatility, while Boeing’s share price slumped sharply in the wake of a deadly 787 Dreamliner crash in India.

READ: Asian shares stumble after Trump’s latest trade threat

In New York, investors cheered benign US producer price data and a successful US Treasury auction that sent yields lower.

But markets were leery after Trump on Wednesday said he would be sending letters within the next two weeks to other countries’ governments to announce unilateral US levies on their exports to America.

“This is the deal, you can take it or leave it,” Trump told reporters.

Investor unease about Trump’s trade rhetoric is “causing a little bit of selling,” said Jack Ablin of Cresset Capital Management.

In the end, the S&P 500 finished up 0.4 percent after a see-saw session.

All European stock markets finished lower, except London, which posted an uptick despite official data showing the UK economy shrank more than expected in April.

The dollar was down against the euro, and at one point fell by more than one percent to its lowest point in three years against the European single currency.

“Trump has done it again. The US president has rattled markets with fresh threats of unilateral tariff rates on several trading partners,” said Fawad Razaqzada, market analyst at FOREX.com.

Markets were also following reports that Israel was poised to launch airstrikes on Iran.

Trump called Thursday on Israel not to attack Iran, saying a deal on its nuclear program remained close.

But Iran has ramped up rhetorical pressure before upcoming talks, including with a threat to strike American bases in the region if the negotiations break down and conflict erupts.

Oil prices, which had initially jumped on Wednesday on the heightened tensions, flipped direction for much Thursday, finishing modestly lower.

Back in New York, Boeing dropped nearly five percent after a London-bound Air India plane — a Boeing 787 — crashed in Ahmedabad with 242 people aboard.

The US planemaker declared itself ready to support Air India following the crash, the first involving a 787 Dreamliner.