He global dollar was struggling to regain ground against major currencies this Wednesday, hovering near two-week lows, as the lack of clarity over the US president’s plans, donald trumpon tariffs kept financial markets in uncertainty.
Trump said Tuesday night that his administration was discussing the possibility of imposing a 10% tariff on goods imported from China on February 1, the same day he previously said that Mexico and Canada They could face levies of around 25%. He also promised tariffs on European imports, without providing further details.
Despite those threats, the lack of specific plans from Trump’s first day in office caused the dollar to start the week down 1.2% against a basket of coins important. It stabilized and ended unchanged on Tuesday after a recovery attempt failed, and US officials said any new taxes would be imposed in a measured manner.
He dollar index, which tracks the currency against six major rivals, fell 0.1% to 108 on Wednesday, not far from the two-week low of 107.86 hit on Tuesday. “Tariffs were in the news again overnight, when Trump commented that his threat of a new 10% tariff on China was still on the table,” Deutsche Bank’s Jim Reid told Reuters.
“Trump’s comments leave a lot of uncertainty in the short term, although trade investigations stemming from his day one executive orders will take some time to resolve,” he added.
Trump signed a sweeping trade memorandum on Monday, ordering federal agencies to complete comprehensive reviews of a range of trade issues by April 1.
Inflation risks in the United States
He euro was virtually unchanged at $1.0428 and was trading near the two-week high it hit on Tuesday. Meanwhile, the pound sterling, which reached its highest level in a week and a half in the previous session, fell slightly to $1,235.
Analysts have said that Trump’s policies on immigration, taxes and tariffs will likely boost growth but also be inflationary, but the more cautious tariff approach has fueled some hopes that inflation risks could be more limited.
Traders expect a cut in the interest rate of a quarter point by the Fed for July, while another reduction by the end of the year is considered a coin toss.
He Canadian dollar remained unchanged and remained at 1.4326 per US dollarafter a volatile week that saw it fall as low as 1.4520 overnight for the first time since March 2020, feeling additional pressure from cooling inflation last month.
He mexican peso it gained about 0.19% to 20.572 per dollar. Meanwhile, the chinese yuan weakened slightly to 7.275 per dollar in offshore trading, although that was after hitting its strongest level since December 11 at 7.2530 on Tuesday.
“A 10% tariff on imports of China would be well below the 60% rate he mentioned in his campaign,” said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.
“Added to this is the general feeling that Trump is not pursuing maximalist trade protectionism in his early actions, but rather appears to be positioning himself for trade negotiations,” Tan noted. “Taken together, all of this suggests that the US dollar could fall. even more,” he added.
Source: Ambito
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