Trade tensions are usually negative for the currency of the country initiating them and in this case it was the US dollar that reacted first to pres Obamas announcement to impose duties on Chinese-made tries. But the dollar later rebounded when China said it would investigate dumping by of autos and chicken products from the US. The possibility of a trade war would be detrimental for the world economy and post-crisis financial markets recovery. The dollar rally was boosted by falling Japanese and European equities, while the unexpected decline in NZ retail sales accelerated the sell-off in the high yielding NZD. With Dow futures -77 pts, USD outperforms JPY on global risk aversion. USDCAD attempts to regain 1.09, while AUDUSD is vulnerable to tetsing 0.8470.