April 8 (Reuters) - The dollar fell and haven currencies rose on Tuesday as equites reversed gains after the White House said 104% tariffs on China will go into effect starting Wednesday, after Beijing did not lift its retaliatory tariffs by the U.S. deadline. USD/CNH surged to a record high of 7.4138 after eclipsing 7.40 barriers. All eyes are on the the USD/CNY fix after it was set it at 7.2038 on Tuesday. Earlier in the session, risk sentiment was improving after U.S. Treasury Secretary Scott Bessent indicated that countries had reached out for tariff negotiations and that all options were being considered. He also mentioned that U.S. trade negotiators were prioritizing allies. The White House spokesperson later noted that 70 countries were seeking to start tariff negotiations, saying that deals will be "tailor-made" and that President Trump believes China must make a deal with the United States. United States Trade Representative Jamieson Greer mentioned that exemptions to President Donald Trump's global tariffs are unlikely in the near term and that there is no specific timeline for trade negotiations. Greer told senators that most countries said they won't retaliate and that U.S. companies could feel pain from reworking supply chains. Chicago Federal Reserve Bank President Austan Goolsbee said that U.S. tariffs are significantly larger than anticipated, and it is uncertain how quickly costs will be passed on. Short-term interest rate futures suggest a 56% chance of the Federal Reserve cutting rates in May.
The demand for haven assets boosted the yen and Swiss franc. USD/CHF fell over 1.3% to 0.8481, with further declines below 0.84 bringing markets into 2015 flash crash territory.
EUR/USD rose to the top of its 1.0888 to 1.0992 range as the greenback retreated. Wider German-U.S. 2-year spreads and a sinking CNH may slow its advance. European Central Bank policymaker Yannis Stournaras said tariffs could delay policy normalization. ECB's Robert Holzmann said there was no reason to cut interest rates further while fellow policymaker Joachim Nagel said tariffs will be a massive drag on global growth.
GBP/USD settled between its 55-day moving average at 1.2788 and 200-day moving average at 1.2812. Bears will gain the upper hand if it fails to hold above its lower 21-day Bollinger at 1.2788. British finance minister Rachel Reeves said she would meet U.S. Treasury Secretary Scott Bessent "shortly".
USD/JPY fell below its March low of 146.55 and revisited its lower 21-day Bollinger at 146.20 as the risk tone deteriorated. A further drop below the April 3 low of 146.10 could see downward momentum build.
Comments by Bank of Japan Governor Kazuo Ueda and Japan consumer confidence will be monitored on Wednesday. Treasury yields were mixed as the curve steepened sharply. The 2s-10s curve was up about 13 basis points to +41.0bp.
The S&P 500 fell 1.3% amid broad selling.
Oil dropped over 2% on concerns about global demand.
Gold was flat while copper slid 1.3%. Heading toward the close: EUR/USD +0.62%, USD/JPY +1.10%, GBP/USD +0.61%, AUD/USD -0.27%, =USD -0.61%, EUR/JPY -0.56%, GBP/JPY -0.57%, AUD/JPY -1.49%.(Editing by Burton Frierson Reporting by Robert Fullem)
