Dollar regains footing; European stock markets sag

LONDON: The dollar regained its footing on Thursday, after tanking overnight as US President Donald Trump voiced fears about a strong greenback.

European stock markets meanwhile churned lower with trade subdued before the long Easter holiday weekend.

Investors were also awaiting key first-quarter bank results from US heavyweights JPMorgan, Citigroup and Wells Fargo.

In Thursday morning London deals, the European single currency fell to $1.0641 after briefly strengthening on the Trump remarks.

And the US unit held steady against the safe-haven Japanese yen after slumping overnight to 108.73 yen -- a low last witnessed in November.

The Frankfurt, London and Paris stock markets all shed between 0.4 and 0.7 percent in value.

"Trump's comments about a stronger dollar continued to drive trading this Thursday, the reaction being slightly overdone thanks to subdued volumes ahead of the Easter break," Spreadex analyst Connor Campbell told AFP.

"With both the pound and euro taking nearly half a percent off the greenback, the (European) indices found themselves on the back foot (with) the FTSE, DAX and CAC all in a state of red."

Asian markets were mixed Thursday after Trump also softened his stance on Beijing, easing concerns of a possible trade war, dealers said.

The dollar took a tumble after Trump told The Wall Street Journal that he was worried about its strength and said he favoured low interest rates.

"I think our dollar is getting too strong, and partially that's my fault because people have confidence in me. But that's hurting -- that will hurt ultimately," Trump told the paper.

Trump also reversed course on an earlier vow to label Beijing a currency manipulator and slap punitive tariffs on Chinese imports.

- China 'not currency manipulators' -

China for years was accused of keeping its currency artificially low to make its exports cheaper and more competitive compared to US goods.

"They're not currency manipulators," Trump said in the interview.

Geopolitical tensions meanwhile continued to weigh on investor sentiment, as ties between the US and Russia turn increasingly frosty over Moscow's backing for Syrian President Bashar al-Assad.

But Trump's praise for Chinese President Xi Jinping Wednesday raised hopes of easing friction between the two superpowers over dealing with North Korea's nuclear programme.

And a surge in Chinese exports in March, the largest jump in two years, bolstered hopes that the world's number two economy is getting back on track after a recent slowdown -- it grew last year at its slowest pace in a quarter of a century.

Trump went out of his way to praise Xi, saying he was "very impressed" following a meeting between the two leaders in Florida last week.

"I think we had a very good chemistry together. I think he wants to help us with North Korea," Trump said in a Wednesday press conference.

Copyright AFP (Agence France-Press), 2017