NEW YORK (Reuters) – The U.S. dollar fell to a seven-week low against a basket of key world currencies on Monday and global stock markets slipped amid investor concerns over protectionist rhetoric by U.S. President Donald Trump.

U.S. Treasury yields dipped and gold rallied as demand for safe-haven assets was boosted by Trump’s stance on trade.

On Monday, Trump told U.S. manufacturing executives he would impose a hefty border tax on firms that import products into the United States after moving American factories overseas.

He also formally withdrew the United States from the Trans-Pacific Partnership trade deal.

Fears of a protectionist White House, and scant details on proposed tax cuts, infrastructure spending and deregulation, have prompted some investors to reassess the level of possible future government stimulus to bolster the U.S. economy.

“Given that the President’s first order of business is challenging trade deals, it has probably caught a number of optimistic investors off balance,” said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.

“Investors were positioning for tax cuts and regulatory roll backs out of the gate. Perhaps they are impatient but they are certainly disappointed.”

The dollar index, which measures the greenback against six major rivals, was down 0.59 percent at 100.15.

The safe-haven yen has been the main beneficiary of recent U.S. political uncertainty, rising for a second session against the dollar.

MSCI’s world index, which tracks shares in 46 countries, was little changed. The index found little support from Wall Street as the S&P 500 was on track for its worst session of the year.

The Dow Jones Industrial Average fell 47.3 points, or 0.24 percent, to 19,779.95, the S&P 500 lost 8.07 points, or 0.36 percent, to 2,263.24 and the Nasdaq Composite dropped 7.64 points, or 0.14 percent, to 5,547.70.

Among individual stock movers, shares in Qualcomm Inc dived almost 15 percent after it was sued by Apple on Friday.

European shares fell, weighed down by banks, oil stocks and a fall in Fingerprint Cards after the firm’s former CEO and a board member were arrested.

Europe’s broad FTSEurofirst 300 index closed down 0.48 percent at 1,425.49, its lowest close this year.

In bond markets, U.S. Treasury yields slipped ahead of $88 billion in government debt supply this week as investor jitters over Trump’s tough stance on trade spurred safe-haven demand for bonds.

The U.S. 10-year note was up 18/32 in price to yield 2.403 percent, down from a yield of 2.467 percent late on Friday.

Oil prices eased as signs of a strong recovery in U.S. drilling largely overshadowed news that OPEC and non-OPEC producers were on track to meet output reduction goals.

Brent crude settled down 26 cents, or 0.47 percent, at $55.23 a barrel, and U.S. crude settled down 47 cents, or 0.88 percent, at $52.75.

Gold rose to the highest in two months as uncertainty over Trump’s economic policies led investors to reach for safe-haven assets.

Spot gold was up 0.57 percent to $1,216.41 an ounce.

By Saqib Iqbal Ahmed

(Additional reporting by Richard Leong and Chuck Mikolajczak; Editing by Bernadette Baum and Nick Zieminski)

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