Floranna
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#TrumpTariffs TrumpTariffs The most recent tariffs imposed by President Donald Trump, including the notable 145% tariff on Chinese products and threats of 25% levies on Mexico and Canada, have exerted significant pressure on the U.S. dollar. Currently, the U.S. Dollar Index (DXY) trades near 96.97, a level not seen in over three years, reflecting a sustained weakening since early 2025, the worst start to the year for the currency since 1973.
Observed Effects
Value drop: The tariffs have generated uncertainty, pushing the dollar to multi-year lows against currencies like the euro (EUR/USD at $1.18) and the Swiss franc. The perception of an unstable economic environment has reduced its appeal as a safe haven.
Inflation and interest rates: The tariffs, by increasing import costs, have fueled fears of persistent inflation, which could delay rate cuts by the Federal Reserve. This has weakened the demand for the dollar, as investors anticipate less restrictive monetary policies.
Investor outflow: Trump's erratic trade policy has raised doubts about the stability of U.S. assets. Some analysts suggest that investors are diversifying into other currencies or assets like gold, exacerbating the dollar's decline.
Observed Effects
Value drop: The tariffs have generated uncertainty, pushing the dollar to multi-year lows against currencies like the euro (EUR/USD at $1.18) and the Swiss franc. The perception of an unstable economic environment has reduced its appeal as a safe haven.
Inflation and interest rates: The tariffs, by increasing import costs, have fueled fears of persistent inflation, which could delay rate cuts by the Federal Reserve. This has weakened the demand for the dollar, as investors anticipate less restrictive monetary policies.
Investor outflow: Trump's erratic trade policy has raised doubts about the stability of U.S. assets. Some analysts suggest that investors are diversifying into other currencies or assets like gold, exacerbating the dollar's decline.
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
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