U.S Dollar Sits at 6-Month Low as Tariffs Hit 180 Countries
The US dollar slumped to six months low against key trading pairs in the forex market as U.S reciprocal tariffs hit 180 countries of the world in a massive shift in global economic order.
US.S president Donald announced reciprocal tariffs against the trading partners caused demand for the greenback to slump in the FX market. Forex traders, analysts echoed the need to sell down USD to gauge the market direction on expectation of retaliation from other economic bellwethers – especially, the Europeans and China in particular.
The greenback slumped to a six-month low against a basket of six rival currencies On Thursday while DXY index retreated after mild recovery at the beginning of the week.
The EURUSD pair pushed higher on Thursday morning as European traders woke up to the news of tariffs reverberating across the world. It’s the end of globalization, many headlines were saying, after Donald Trump unveiled a package of offensive tariff measures that threatened to end global trade as we know it.
Europe is getting slapped with a 20% tariff, China is looking to get another 34% to a total of 54% on its imports into the US. In all, 180 countries have been added to America’s tariff agenda.
The US dollar fell against its major trading partners early Thursday ahead of the release of weekly jobless claims and trade data for February.
Earlier Thursday, outplacement firm Challenger, Gray & Christmas reported that there were 275,240 layoff intentions in March, up considerably from 172,017 job cuts in the previous month and the largest monthly total since May 2020 at the start of the pandemic. The Department of Government Efficiency announced 216,670 of those layoffs.
Federal Reserve Vice Chair Philip Jefferson is due to speak followed by an appearance by Fed Governor Lisa Cook at 2:30 pm ET. A quick summary of foreign exchange activity heading into Thursday showed that USDEUR rose to 1.1053 from 1.0850 at the Wednesday US close and 1.0797 at the same time Wednesday morning.
The Eurozone’s services purchasing managers’ index rose in March while producer prices rose less than expected in February, but the year-over-year rate accelerated, according to data released earlier Thursday.
European Central Bank Vice President Luis de Guindos said overnight that the US tariffs announced on Wednesday cause uncertainty in the economic outlook for Europe, particularly for inflation. The next European Central Bank meeting is scheduled for April 16-17.
GBPUSD rose to 1.3151 from 1.2982 at the Wednesday US close and 1.2939 at the same time Wednesday morning. The UK’s services PMI rose less than expected in March but still indicated expansion, according to data released earlier Thursday. The next Bank of England meeting is scheduled for May 8.
USDJPY fell to 146.5997 from 150.0443 at the Wednesday US close and 149.2977 at the same time Wednesday morning. The Japanese services PMI declined in March to indicate neither expansion nor contraction, according to data released overnight.
The next Bank of Japan meeting is scheduled for April 30-May 1. USDCAD fell to 1.4143 from 1.4318 at the Wednesday US close and 1.4324 at the same time Wednesday morning. Canadian trade balance data for February is due to be released while the next Bank of Canada meeting is scheduled for April 16. #U.S Dollar Sits at 6-Month Low as Tariffs Hit 180 Countries
