Dollar Index Falls to 3-Year Low as Fears of Holding Greenback Grows
The US dollar lost against trading pairs of the euro and sterling, including the Japanese yen, in the foreign exchange market amidst fears about the global trade outlook.
Forex traders are increasingly wary of holding the US dollar amid all the tariff tantrum that’s going on between the US and China, which will deflate global economic growth and fuel inflation.
The sentiment reflects on the dollar index, which fell by over 1% to 99.7 on Friday, its lowest level in nearly three years, as investors continued to pull out of US assets. Escalating trade tensions and growing concerns over the broader economic fallout – particularly for the US – have weighed heavily on sentiment.
On Friday, China’s finance ministry announced plans to raise tariffs on US imports to 125%, up from the previous 84%, in direct retaliation for Washington’s decision to hike tariffs on Chinese goods to as much as 145%.
In addition, the US maintains a 10% tariff on imports from most countries and continues to levy a 25% duty on steel, aluminum, and autos. While the 90-day truce announced by President Trump briefly lifted hopes for renewed trade negotiations, fears of a recession are gaining momentum.
The dollar weakened most notably against the euro and traditional safe-haven currencies, including the Japanese yen, and dropped to a 14-year low against the Swiss franc.
Japan is ready to discuss non-tariff issues, including foreign exchange rates, with the Trump administration as part of negotiations to win exemption from higher duties, economy minister Ryosei Akazawa said.
“Since this is a negotiation, we cannot simply shut out anything the other side brings up from the beginning,” Akazawa, who has been picked to lead tariff talks with Treasury Secretary Scott Bessent, said Friday. #US Dollar Index Falls to 3-Year Low as Fears of Holding Greenback Grows First Holdco Falls below N1 Trillion in Equities Market
