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Thursday, Donald Trump’s latest commercial threats pushed the dollar to his lowest level in three years, while the increase in concerns about trade and geopolitics has expressed new pressure on money.
The dollar was trained lower after the American president told journalists to send letters to the business partners describing new prices in the next two weeks, at the end of the 90 -day break on so -called “reciprocal” samples.
The greenback dropped 0.8% against a basket of its business partners, including the book and the euro. This decision means that the currency fell beyond the bottom that it struck following the price of Trump’s “liberation day” in early April and at its lowest level since March 2022.
“”[Trump’s] The commentary certainly indicates an escalation renewed in commercial tensions before the official deadline, “said Derek Halpenny, analyst in MUFG.
Investors would also digest a commercial truce between the United States and China announced on Wednesday, and the increase in tensions between the United States, Israel and Iran, the Trump administration authorizing military staff to leave the Middle East.
“We will see what’s going on,” Trump told journalists on Wednesday. “They [Iran] I cannot have a very simple nuclear weapon. “”
While trade tensions have continued to weigh on the dollar, the actions have since bounced back from their April diving, the S&P 500 approaching a new summit of all these last days. The term markets indicated a slide of 0.5% for the Wall Street reference on Thursday.
Actions also dropped in Europe, the Stoxx Europe 600 down 0.9%.
Wednesday, American inflation lower than it also weighed on the dollar this week by opening the door to faster interest rate reductions in the Federal Reserve. The term markets are entirely prices in two decreases of two -point prices from the Fed this year.
On the other hand, the signals of the European Central Bank last week that it could be close to the end of its rate reduction cycle pushed the higher euro. He climbed $ 1,160 against the dollar, his strongest level since November 2021.
The movements have aggravated a slide in the dollar which killed it by around 10% this year while economic concerns concerning the mixture of trade war with concerns concerning an increase in the deficit and the signs that certain investors reduce their exposure to American assets. A budgetary provision that would allow the government to increase taxes on foreign investments has added to the discomfort.
“Foreigners sell each rally in the dollar on political chaos, ball debt and other threats for their investments,” said Trevor Greetham, responsible for the multi-actives for Royal London Asset Management.
The weakness of the greenback “has much more room to run,” said Vasileios Gkionakis, principal economist at Aviva Investors. “The lag of American exceptionalism is the source of the American risks premium and weighs on the value of the dollar.”
