- Global growth worries trigger losses for oil, Wall Street
- Beijing retains growth target of 5%, lines up more stimulus
- Euro pushes to four-month peak on German spending boost
TOKYO, March 5 (Reuters) - The U.S. dollar hovered near a three-month low against major peers on Wednesday after the latest round of U.S. tariffs and countermeasures from Canada and China fuelled an escalating trade war.
Hong Kong stocks rose, but the yuan retraced some of Tuesday's advance as China began annual sessions of its parliament, the National People's Congress (NPC), with Beijing retaining a goal of roughly 5% in economic growth for 2025.
The euro pushed to a nearly four-month peak after German political parties agreed to a 500-billion-euro infrastructure fund. Sterling also stood tall near a three-month high.
Crude oil swooned to six-month lows, while bitcoin found its feet around $87,500, following a volatile week.
"Fears about weaker U.S. and global economic activity are manifesting in the markets, with cyclicals driving the sell-off," said Kyle Rodda, senior financial markets analyst at Capital.com.
"The uncertainty is enough to keep investors cautious, with American businesses and consumers presumably feeling the same."
Australian stocks slumped 0.7%, while Japan's Nikkei added 0.4% after flipping between small gains and losses.
Hong Kong's Hang Seng rallied 2.1%, and an index of mainland blue chips rose 0.3%.
China's offshore yuan edged down 0.1% to 7.2640 per dollar, after strengthening 0.7% on Tuesday.
Along with its unchanged economic growth target, Beijing committed more fiscal resources than last year to mitigate the impact of rising U.S. tariffs.
China aims for a budget deficit of about 4% of gross domestic product (GDP) in 2025, up from 3% in 2024.
"Growth, inflation and fiscal spend targets were all pretty much as expected," said Charu Chanana, chief investment strategist at Saxo.
"It doesn't look like China wants to go overboard with spending right away, given the tariff threats, as they potentially want to save ammunition for external threats later in the year."
Overnight, the U.S. S&P 500 slid 1.2%, but futures rose 0.6% on Wednesday.
MSCI's world equity index was largely flat, leaving it 1.9% lower so far this week.
U.S. President Donald Trump's 25% tariffs on imports from Mexico and Canada, along with doubled duties of 20% on Chinese goods, took effect on Tuesday.
China and Canada retaliated while Mexican President Claudia Sheinbaum vowed to respond likewise, without giving details.
The U.S. dollar index , which measures the currency against the euro, sterling and four other major counterparts, was little changed at 105.55, after a two-day slump of 1.9% that took it as low as 105.49 for the first time since December 6.
The euro rose as high as $1.0637 for the first time since November 13 in the latest session.
Sterling was steady at $1.2794, not far from Tuesday's peak of $1.27995, a level last seen on December 6.
The parties hoping to form Germany's next government agreed on Tuesday to create a 500-billion-euro infrastructure fund and overhaul borrowing rules in a tectonic spending shift to revamp the military and revive growth in Europe's largest economy.
Oil fell for a third session on Wednesday, amid concerns over global growth due to tit-for-tat tariffs and plans by OPEC+ to raise output in April.
Brent futures eased 0.4% to $70.78 a barrel, after falling as low as $69.75 in the previous session, the lowest since September 11.
U.S. West Texas Intermediate (WTI) crude slumped 0.9%to $67.65 after dipping to $66.77 in the previous session for the first time since November 18.
Reporting by Kevin Buckland; Editing by Jacqueline Wong and Clarence Fernandez
Source: Reuters