The impeachment inquiry into Trump has rattled global markets and poses 'a serious setback' to resolving the trade war

• Global markets have tumbled after House Speaker Nancy Pelosi's announced that Congress would be launching a formal impeachment inquiry into President Trump.
• The raised prospect of an impeached US President, while slight, has been enough to suppress markets globally and make a trade war resolution look more uncertain.
• Anticipating the move on Tuesday, Wall Street closed weaker as did those that woke up to the development. Australia's ASX 200 tumbled around 0.5% on opening alongside Japan's Nikkei 225 and Korea KOSPI, while Hong Kong's Hang Seng fell 0.8% and the Shanghai Composite shed 0.7%.
• The US dollar fell due to share market losses, but could actually bounce no matter which way the impeachment process goes, according to a currency strategist.

Financial markets have tumbled after Speaker Nancy Pelosi indicated that the House would pursue an impeachment inquiry into President Donald Trump.

The news rolled on to global markets waking up to the news. The ASX in Australia, the Nikkei 225 in Japan and the KOSPI in Korea all opened around 0.5% weaker.

The Shanghai Composite shed around 0.7% at the opening bell, while Hong Kong's Hang Seng dropped 0.8% in early trade.

While an impeachment appears unlikely right now, the process itself could set back any resolution to the trade war with China.

"Impeachment, and the impeachment process, will drain the US President's authority. We are not suggesting this process is certainly going to end in impeachment [but] the US President, with less authority, has less ability to both obtain a deal from China and then have it ratified by Congress," Australia's Commonwealth Bank commodities strategist Tobin Gorey said in a note issued to Business Insider Australia.

"Right now, that looks like a serious setback."

The inquiry surrounds allegations that Trump sought to pressure Ukrainian President Volodymyr Zelensky to investigate potential presidential rival Joe Biden, and his son Hunter Biden, over ties to a Ukrainian gas company.

READ MORE: Trump aides were so afraid he'd pressure Ukraine to investigate Biden that they tried to derail his call with the Ukrainian president

While the suggestion the Democrats could try to impeach the president has been long-running, Pelosi had been reluctant to move along with an inquiry until now, telling The Atlantic she now feels comfortable that public sentiment is on her side.

Pelosi was widely expected to make the announcement on Tuesday evening, with 142 points, or 0.53%, coming off the Dow Jones prior to the closing bell. The S&P 500 shed 0.84%, while the Nasdaq plummeted 1.46%. That wasn't helped by weak consumer confidence data, adding to worries of a US economic slowdown.

While the US dollar also showed some weakness, some currency analysts believe that could be short-lived no matter which way the inquiry goes.

"We don't believe the impeachment proceedings are necessarily negative for the USD. In fact, US dollar might gain as the greenback typically benefits from fear-driven moves due to its 'safe haven' status," Western Union Business currency strategist Steven Dooley said in a note issued to Business Insider Australia.

"During the Clinton impeachment proceedings, the USD index fell in the lead-up to formal impeachment, and then rallied 9.0% during the official process and eventual 'not guilty' verdict," he said.

That could see the greenback move higher at the same time that Wall Street weakens.