- The fears of a recession in the USA in the middle of a commercial war with China hit the USD hard.
- Beijing on Friday announced 125% retaliation tariffs on US imports.
- The US dollar index fell to a minimum of three years of 99.02, maintaining the bassist trend.
The US dollar index (DXY) bounced from a new minimum of three years of 99.02 reached Friday amid the growing tensions between China and the United States (USA). The index currently around 99.70, falling dramatically for the second consecutive day.
The DXY, a measure of the US dollar (USD) in front of a basket of main currencies, fell into European morning trade after the headlines indicating that China would retaliate against the last announcement of tariffs of the White House. On Thursday, the US confirmed 145% China tariffs, 20% initially imposed, more than 125% announced.
As a result, China’s Ministry of Finance announced Friday that the country will increase additional tariffs on US imports from 84% to 125%, from April 12. The feeling of the market collapsed later and pushed the DXY towards the aforementioned minimum.
In addition, the China Ministry of Commerce urged the US to take a great step forward in the elimination of the so -called “reciprocal tariffs” and completely correct their wrong practices.
The feeling deteriorated with the news that revived the speculation that a recession in the US is just around the corner.
Technical Perspectives of the American Dollar Index
The DXY remains under strong pressure, and the technical readings in the daily chart suggest that the fall is far from having finished. The index is developed well below all its mobile socks, with the simple mobile average (SMA) of 20 gaining bearish traction below the SMAS of 100 and 200, which is usually a prevailing sales pressure sign.
At the same time, the technical indicators maintain their strong bassist impulse within negative levels, while they are far from overall readings.
FAQS tariffs
Although tariffs and taxes generate government income to finance public goods and services, they have several distinctions. Tariffs are paid in advance in the entrance port, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, while tariffs are paid by importers.
There are two schools of thought among economists regarding the use of tariffs. While some argue that tariffs are necessary to protect national industries and address commercial imbalances, others see them as a harmful tool that could potentially increase long -term prices and bring to a harmful commercial war by promoting reciprocal tariffs.
During the election campaign for the presidential elections of November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy. In 2024, Mexico, China and Canada represented 42% of the total US imports in this period, Mexico stood out as the main exporter with 466.6 billion dollars, according to the US Census Office, therefore, Trump wants to focus on these three nations by imposing tariffs. It also plans to use the income generated through tariffs to reduce personal income taxes.
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.
