Australian shares rise after Trump retreats on tariff threat over Greenland

Australian shares shot higher on Thursday, recouping part of recent losses after Donald Trump dropped a tariff threat used against European allies amid his pressure campaign to gain control of Greenland. The de-escalation fuelled a global rally that flowed into Australia, briefly pushing the benchmark S&P/ASX 200 above the 8,860 point mark before a slight easing.

The index was up about 0.6% in afternoon trading, representing about $17bn in market value and recouping about half of last week’s losses. The Australian dollar hit a 15-month high against the US dollar, trading near the US68c mark. Market commentators said the retreat again rewarded dip buyers who have followed the “Trump Always Chickens Out” (Taco) trade.

Trump said he has a "framework of a future deal" on Greenland, without elaborating, while Danish MP Sascha Faxe suggested in an interview that the deal Trump claims to have struck with Nato over Greenland is "not real". Michael McCarthy said risk was "building up in the market, all the arrows are pointing up" and listed outbreak of inflation, a serious increase in geopolitical tensions, and a US bond sell-off as potential triggers for a sustained equity correction.

Key Topics

Business, Donald Trump, Greenland, Australian Dollar, Iron Ore, Us Bonds