The dollar American remains firm on Tuesday, since the president’s tariff threats Donald Trump They were interpreted more as a negotiation tactic than as a final objective, A day after suspending the planned measures against Mexico and Canada.
However, the new Trump administration imposed additional 10% tariffs on China imports from 12:01 am on Tuesday, and Forex analysts expected a high sensitivity to tariff developments and that volatility would persist.
The US dollar index, a measure of the dollar value against a weighted basket of six main foreign currencies, It remained virtually unchanged at 108.5, while the Canadian dollar and Mexican peso weaken after having rebounded on Monday.
The euro also yields abruptly, with Washington threatening that the European Union could be the following in the line of commercial tariffs, which is expected to increase inflation in the US, which in turn supports the dollar by keeping the The highest US interest rates for longer. “It is clear that Trump wants to negotiate“said Marcus Widén, SEB economist.
“But at the same time, There is a basic idea that tariff income should finance tax cutsand from that perspective, one might ask if you can reverse tariff plans every time, “he added.
Beijing imposed on Tuesday tariffs on some imports from the United States. As a rapid response to new USAs on Chinese products, raising bets in the confrontation between the two main economies of the world. “In general, the measures (Chinese) are relatively modest,” said Lee Hardman, a senior currency analyst in MUFG.
“This suggests that China is careful not to respond too strong to Trump’s latest tariff Trump threatened to increase tariffs up to 60%. Analysts also pointed out that it will be difficult for China and the US. Uu. Agree on what Trump demands.
The Chinese yuan fell 0.15% to 7,2914 per dollar in offshore trade. There will be no official Yuan trade until Wednesday, since the markets of the continent are still closed by the one -week’s lunar holiday holidays.
The Australian dollar, which often acts as a liquid proxy for Yuan due to the high exposure of the Australian economy to China, fell 0.35% to $ 0.6206, well above the minimum of Monday of $ 0.6085, the lowest level since April 2020.
EURO IN THE LOOK
The euro falls 0.15% to $ 1,033, with market participants analyzing parity. “The maximum risk premium for Commercial War Vista during the first Trump administration is being six large figures, which would lead to the euro/dollar to parity,” says George Saravelos, head of currency investigation at Deutsche Bank.
“A downward review of the European Central Bank) at 1.50%, with the (political route) of the Fed without changes, is taking to the euro/dollar even below, at 0.98-0, 99, according to current betas. ” Several analysts say that US tariffs have a deflationary effect on the euro zone.
Monetary markets increase their bets for ECB features, anticipating a 1.85% deposit rate in December, compared to 1.95% last Friday. Currently, they discount 1.9%.
The Canadian dollar loses 0.15% to C $ 1,4428 against the US dollar, after a strong rebound from the minimum of C $ 1,4792 on Monday, the lowest level since 2003.
The Mexican weight falls 0.23% to 20,380, after jumping more than 1.5% the previous day.
The sterling pound goes in front of the euro after registering its greatest daily increase in three months, since investors expect US tariffs to affect the European economy more than that of the United Kingdom.
The US dollar rises 0.38% to 155.31 yen, with the Japanese currency considered a shelter and the least attractive dollar after the recent increases.
Source: Ambito
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