- The dollar cuts previous profits in a Risk Risk Market with uncertainty about increasing tariffs.
- Trump is expected to firm a broad fiscal bill that could increase doubts about the sustainability of US debt.
- The currency trade volumes are contained on Friday since US markets are closed.
He US dollar index (DXY), which measures the value of the dollar against the six most negotiated currencies in the world, is going back from Thursday’s maximum on 97.40, and back to levels below 97.00, since the euphoria of the strong payroll report has become cautious as the deadline of tariffs is approaching.
With July 9, just around the corner and only three commercial agreements signed with China, the United Kingdom and Vietnam, Trump announced Thursday that he will send letters to all commercial partners informing them about the tariffs that will be applied to their products.
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Perspectives of greater levies to a long list of countries have renewed concerns about greater inflation and lower economic growth, which has undermined the US dollar since the “Liberation Day” of April 2.
Beyond that, Trump’s tax bill, which is expected to increase the charge of US debt in 3.3 billion dollars in the next ten years, has passed through Congress and will be signed by the president, probably today. This legislation will probably feed concerns about the sustainability of the US government debt and will act as an obstacle to the recovery of the US dollar.
The currency markets, however, are half a gas on Friday with the US market closed by the Banking Holiday of Independence Day. This is limiting negotiation volumes and leading to a rank trade among most American dollar crosses. In this context, it is likely that DXY descent attempts remain limited.
Tariffs – Frequently Questions
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.
