TOKYO (Reuters) - U.S. stock futures and the dollar slumped on Wednesday after a key advocate for free trade in the White House announced his resignation, fanning fears President Donald Trump would go ahead with tariffs and risk a trade war.
White House economic adviser Gary Cohn, seen as a bulwark against protectionist forces within the Trump administration, said on Tuesday he was leaving.
S&P 500 futures dropped more than one percent in early Wednesday trade.
In the currency market, the dollar fell as much as 0.6 percent against the yen to 105.48 yen , near its 16-month low of 105.24 touched on Friday.
Against the Swiss franc, the dollar also shed 0.4 percent to 0.9365 franc , while the euro ticked 0.15 percent to $1.2422 .
"The worst outcome for financial markets, in terms of potential to create volatility, would be a confirmation of rising trade friction and benign neglect of the dollar in the short term," said analysts at ANZ.
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The Canadian dollar and the Mexican peso tumbled as Cohn's departure was seen as raising risks Washington could walk out of NAFTA.
The Canadian dollar fell 0.4 percent to C$1.2920 per dollar while the Mexican peso dropped 0.6 percent to 18.85 to the dollar .
Cohn's resignation poured cold water on a recovery in risk appetite following news on Tuesday that South Korea would hold its first summit with the North in more than a decade.
(Reporting by Hideyuki Sano in Tokyo, Wayne Cole in Sydney; Editing by Sam Holmes)
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