Dollar index slips under 102 mark as trade war escalates

The dollar index is losing momentum amid growing concerns of escalating trade war that could push the US economy into recession. US president Donald Trump raised additional tariffs on China to an unprecedented levy of 104 per cent, effective today. China had responded to President Trump's ultimatum to "withdraw" Beijing's retaliatory move. China's commerce ministry said in a statement, adding that "If the US insists on having its way, China will fight to the end." The dollar index that measures the greenback against a basket of currencies is lingering around a six month low and is currently quoting at 101.80, down nearly 1% on the day. In tune with dollar weakness EURUSD and GBPUSD stands to gain by over 1% and 0.34% respectively. Major averages on Wall Street pulled back well off their highs of the session and tumbled firmly into negative territory amid surging risk aversion. The major averages climbed off their worst levels going into the close but still posted significant losses on the day. The Nasdaq plunged 335.35 points or 2.2 percent to 15,267.91, the S&P 500 slumped 79.48 points or 1.6 percent to 4,982.77 and the Dow slid 320.01 points or 0.8 percent to 37,645.59.

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