He euro hit a four and a half month low against the dollar because investors are worried about possible tariffs that the future government of donald trump in USA, that would damage the economy of the euro zone; meanwhile, the greenback in Uruguay opens the week from a new high in a month and a half that it hit on Friday.
He dollar was within striking distance of the levels seen just after the US presidential election. USA against major currencies as markets focused on data and conference speakers Federal Reserve (Fed) and were hoping for clarity on future U.S. policy, Reuters reported.
Analysts expect that the president-elect’s measures donald trump put upward pressure on inflation and bond yields, while limiting the Fed’s scope to ease policy. However, they see investors trading on economic data and clues about the outlook for rates before seeing what policy rates would actually be. trump in practice.
Market participants warned that the sensitivity of the euro The threat of higher tariffs on American imports was evident Friday night, when the media reported that Trump was lining up Robert Lighthizerconsidered a trade hawk, to direct its trade policy. However, two sources familiar with the matter said Trump has not asked Lighthizer to return to the agency that oversees trade policy.
The single currency fell 0.3% to $1.0685, after hitting $1.0679, its lowest level since late June. “The current thesis of the bears of the dollar is that it will be a while until the tariffs are implemented and the Fed recalibrates toward less restrictive monetary policy,” he said Chris Turner head of foreign exchange strategy at ING.
“We do not agree and we believe that this election result clean can boost American consumer and business sentiment while weighing on business sentiment in other parts of the world,” he added.
He dollar index rose 0.3% and stood at 105.32. Last week, it rose more than 1.5% to 105.44, its highest level since early July, after the results of the US presidential election. USA They will show Trump’s victory.
Meanwhile, consumer prices in USA will be published on Thursday and a base reading above the 0.3% forecast would further reduce the possibility of an easing of the Fed in December. JPMorgan said it revised its U.S. terminal rate forecast to 3.5% from 3% and expected a 25 basis point cut by the U.S. Fed every quarter, starting in December.
The dollar rises in Uruguay
For its part, the dollar in Uruguay starts the week with the 0.99% increase it registered on Friday when it closed at 42.146 pesos, according to the price of the Central Bank of Uruguay (BCU).
This increase led the US currency to achieve a weekly improvement of 1.32%, while so far this month the increase is 1.19%. In this way, the dollar is on track to close a year with a significant appreciation, of around 8.01% compared to the end of 2023, even above what the market expects. market.
The strong rise in local exchange market coincides with what happened at the international level, with the dollar index recovering from its fall on Thursday and improving more than 0.5% to 105.07 units.
After the 25 basis point reduction in interest rates by the United States Federal Reserve (Fed), Investors are waiting for the policies of the new administration of the president-elect in that country, Donald Trump.
The possibility of more trade tariffs, restrictive measures against illegal immigration, lower taxes and business deregulation could boost growth and inflation, strengthening the dollar and affecting the Fed’s anticipated loosening of monetary policy.
Source: Ambito
