NEW YORK: Stocks and the dollar fell and gold rose on Tuesday as investors looked for safety after President-elect Donald Trump said the U.S. currency was too strong, while sterling jumped as UK Prime Minister Theresa May promised Parliament a vote on Brexit.
Wall Street opened lower, weighed down by financial and healthcare stocks, and U.S. Treasury prices gained on concerns about Trump's protectionist trade policies. Ahead of Friday's inauguration, investors were waiting to see if Trump would follow through on pledges for tax cuts, infrastructure spending and lighter regulation.
Investors fled the dollar after Trump said U.S. companies could not compete with China "because our currency is too strong. And it's killing us", in remarks published on the Wall Street Journal's website on Monday.
"We see the dollar over-valued against all the main currencies," said asset manager Allianz's chief economist, Stefan Hofrichter.
The dollar was down 0.8 percent against a basket of major currencies, while the euro rose almost 1 percent against the dollar.
The pound, meanwhile, rose as high as $1.2398 before paring gains. It was last up 2.6 percent in sterling's biggest daily rise against the dollar since October 2008 after May said Britain would leave the EU's single market but would seek maximum access to it through a new trade agreement.
The yen hit a six-week high of 112.70 against the U.S. currency as investors sought shelter.
Around 11:15 a.m. ET, the Dow Jones Industrial Average was down 45.53 points, or 0.23 percent, to 19,840.2, the S&P 500 lost 5.77 points, or 0.253667 percent, to 2,268.87 and the Nasdaq Composite dropped 27.88 points, or 0.5 percent, to 5,546.23.
Benchmark 10-year Treasury notes were last up 17/32 in price to yield 2.32 percent, down from 2.38 percent late on Friday. Yields earlier fell to 2.305 percent, the lowest since Nov. 30.
"We're still in the midst of the weak dollar, lower-yield trade," said Jim Vogel, an interest rate strategist at FTN Financial in Memphis. "It seems to represent a reversal from last year, and renewed uncertainty about Brexit and U.S. fiscal policy and the need to stay in Treasuries to diversify."
Gold was up 1 percent at $1,215.9 an ounce and hit its highest point since Nov. 22. It was on track for seven consecutive days of gains.
"The precious metal is clearly the beneficiary of this risk off appetite and traders are building their hedge," said Naeem Aslam, chief market analyst at Think Markets UK Ltd.
Britain's FTSE 100 share index fell 0.08 percent, extending losses as May spoke. The FTSEurofirst 300 index of major European stocks was down 0.1 percent.
In Asia, Japan's Nikkei closed down 1.5 percent at its lowest in more than a month.
Oil prices were mixed after edging higher. Brent crude , the international benchmark, traded at $55.79 a barrel, while U.S. crude was up 0.5 percent at $52.61.
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