July 17, 2019: Fresh trade worries and uncertainty about the Federal Reserve's plans for cutting interest rates weighed on Asian markets Wednesday while fears of a hard Brexit kept the pound wallowing at more than two-year lows.
Oil prices were also struggling owing to questions about the outlook for the global economy, the China-US tariffs stand-off and a stronger dollar.
After last week's optimism sparked by Fed boss Jerome Powell's nod to a cut in rates, investors were taking a more sober view after a number of positive readings on the US economy including on retail sales.
The readings — while coming alongside figures showing a drop in the manufacturing sector — revived worries that the Fed will only make one small reduction in borrowing costs this month, and possibly not make any more this year.
The possibility of rates staying slightly elevated boosted the dollar against the yen, euro and pound on Tuesday and held up in early trade Wednesday.
The pound was taking another hiding with the possibility of a no-deal Brexit growing ever more likely as the two contenders to become prime minister slug it out by trying to take increasingly tough lines with the EU. Sterling is now at its lowest level since April 2017.
The dollar also climbed against most higher-yielding, riskier currencies, jumping 0.8 percent against the Mexican peso, 0.3 percent on the Australian dollar and 0.2 percent versus South Korea's won.
Regional equity markets were also in the red, with confidence jolted by comments from Donald Trump that revived trade tensions with China.
