- The American dollar index slides up to about 99.50 in fears that Trump’s tariff policy is painful for US economy.
- The president of the USA, Trump, has increased reciprocal tariffs to China to 125%.
- The fears of a possible decline in the purchasing power of US households have fogged the feeling of the consumer.
The US dollar (USD) continues to face intense sales pressure, with the US dollar index (DXY) sliding up to about 99.50. The USD index has extended its loss streak for the third day of negotiation in the middle of the commercial war escalation between the United States (USA) and China.
American dollar today
The lower table shows the percentage of US dollar change (USD) compared to the main coins today. US dollar was the strongest currency against the Swiss Franco.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.21% | -0.85% | -0.60% | -0.04% | -0.59% | -0.91% | -0.03% | |
| EUR | 0.21% | -0.15% | 0.08% | 0.62% | 0.37% | -0.27% | 0.62% | |
| GBP | 0.85% | 0.15% | 0.60% | 0.76% | 0.52% | -0.12% | 0.77% | |
| JPY | 0.60% | -0.08% | -0.60% | 0.52% | -0.26% | -0.56% | 0.71% | |
| CAD | 0.04% | -0.62% | -0.76% | -0.52% | -0.51% | -0.87% | -0.06% | |
| Aud | 0.59% | -0.37% | -0.52% | 0.26% | 0.51% | -0.63% | 0.25% | |
| NZD | 0.91% | 0.27% | 0.12% | 0.56% | 0.87% | 0.63% | 0.91% | |
| CHF | 0.03% | -0.62% | -0.77% | -0.71% | 0.06% | -0.25% | -0.91% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the US dollar of the left column and move along the horizontal line to the Japanese yen, the percentage change shown in the box will represent the USD (base)/JPY (quotation).
Last week, Donald Trump announced a 90 -day break in reciprocal tariffs on all its commercial partners, except China. The situation got worse after Trump increased reciprocal tariffs to China to 125% for imposing significant contradictions on the US, the 90 -day pause in reciprocal tariffs was a great relief for all associated nations, which led to a strong recovery in global actions, including those of the US.
However, the US dollar continues to face pressure, since investors expect Trump’s yes-not on import rights and reciprocal tariff fight with China undermine their structural appeal. This has also led to a strong dismantling of the US government bonds. The yields of the US treasure at 10 years have risen almost 14% since last week, but more than 1% have fallen in the European negotiation hours on Monday.
In addition, the deep fall in the feeling of the consumer of US households under Trump’s leadership has also weighed over the US dollar. On Friday, the University of Michigan (UOM) reported that the feeling index of the preliminary consumer was significantly lower in 50.8, compared to estimates of 54.5 and the previous reading of 57.0. American households are losing faith in the midst of the expectations that Trump’s protectionist policies will significantly reduce the purchasing power of households.
Meanwhile, the disagreement of consumer inflation expectations assuming that American importers will support the load of higher tariffs is also complicating the work of the Federal Reserve (Fed), which seeks to maintain price stability and full employment.
US dollar FAQS
The US dollar (USD) is the official currency of the United States of America, and the “de facto” currency of a significant number of other countries where it is in circulation along with local tickets. According to data from 2022, it is the most negotiated currency in the world, with more than 88% of all global currency change operations, which is equivalent to an average of 6.6 billion dollars in daily transactions. After World War II, the USD took over the pound sterling as a world reserve currency.
The most important individual factor that influences the value of the US dollar is monetary policy, which is determined by the Federal Reserve (FED). The Fed has two mandates: to achieve price stability (control inflation) and promote full employment. Its main tool to achieve these two objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the 2% objective set by the Fed, it rises the types, which favors the price of the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.
In extreme situations, the Federal Reserve can also print more dollars and promulgate quantitative flexibility (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is an unconventional policy measure that is used when the credit has been exhausted because banks do not lend each other (for fear of the default of the counterparts). It is the last resort when it is unlikely that a simple decrease in interest rates will achieve the necessary result. It was the weapon chosen by the Fed to combat the contraction of the credit that occurred during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy bonds of the US government, mainly of financial institutions. Which usually leads to a weakening of the US dollar.
The quantitative hardening (QT) is the reverse process for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the wallet values that overcome in new purchases. It is usually positive for the US dollar.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
