(Bloomberg) -- Donald Trump has a more immediate and visible impact on China's markets than on Europe's.
While the U.S. president's tweets that ratcheted up trade tensions with China saw the yuan slump almost 2% over May and June, euro traders have shrugged off his similar sentiments toward the European Union. The common currency barely budged after Trump tweeted Wednesday accusing the EU to be among those using an exchange-rate “manipulation game.”
A gauge of expected euro swings in six months slid to a five-year low this week, a sign of increased market calm, even as the U.S. added more EU products to a list of goods it could slap with fresh tariffs. In contrast, Trump's threat in early May to hike tariffs on China drove up one-month implied volatility on offshore yuan options by the most since early 2017.
Time also may have taken the sting out from Trump's Twitter announcements, if recent market moves are compared to those a few months ago.
A year ago, when the U.S. president triggered what analysts said was the start of a currency war, the Bloomberg Dollar Spot Index saw the biggest drop in more than four months while the euro rallied and the yen jumped almost 1%.
When he tweeted almost the same message again this week, it lacked the punch it once had.
To contact the reporter on this story: Anooja Debnath in London at adebnath@bloomberg.net
To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net, Anil Varma
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