🔹 Indeed, the fall of #DXY (the US dollar index) to a three-year low is attributed to the escalation of the trade war between the US and China.
🔹 The mutual increase of customs tariffs between the US and China creates uncertainty and tension in the global markets.
🔹 China's announcement of raising customs tariffs on American goods to 125% in response to the US raising tariffs to 145% is a vivid example of the escalation of conflict.
🔹 This trade war negatively impacts investor confidence in the dollar, as it is the primary currency for international trade.
🔹 Uncertainty about the pace of US economic growth, especially amid the trade war, is putting additional pressure on the dollar.
🔹 Investors are concerned about the potential consequences of the trade war for the US economy, leading to decreased demand for the dollar.
🔹 Geopolitical tension and trade trust in the dollar as a reliable asset. Investors are seeking alternative safe assets, leading to capital outflows from the dollar.
🔹 The trade war and the fall of the dollar may lead to significant volatility in global financial markets. This can complicate forecasting and planning for businesses and investors.
🔹 Increasing customs tariffs may lead to a reduction in the volumes of international trade. This can negatively impact the economies of countries that heavily depend on international trade.
🔹 Rising prices on imported goods may lead to inflationary pressure in various countries.
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