- The US dollar keeps its upward trend intact, but the price action has stagnated below 147.50.
- Investors could be beginning to worry about the impact of Trump’s tariffs on the US economy.
- At the end of this week, US inflation readings and Japan will probably mark the short -term direction of the torque.
The US dollar is cutting previous profits on Monday. It is quoting practically flat, within the negotiation range of Friday, with a cautious market environment while investors assimilate the negative impact of the high Trump tariffs on the US economy.
The torque maintains most of the profits after the rally of 0.8% on Friday, but still does not find a significant acceptance in the 147.50 area, although the downward attempts are limited so far in 1,4685.
The president of the United States, Trump, shook the markets during the weekend, threatening to impose 30% tariffs on imports from the European Union and Mexico if an agreement is not reached before the deadline of August 1.
US tariffs are weighing on the recovery of the US dollar
These taxes increase taxes of 20% and 25% announced on the day of the release of April 2 and add to the taxes of 35% imposed on Canada a few days before and the tariffs of 50% on copper, aluminum and steel.
Investors continue to trust that this is just a negotiation tool. However, the US president is unpredictable, and the potential impact of such commercial restrictions on the US inflation and economic growth seems to be beginning in spite of the recovery of the US dollar.
On Friday, the president of the Fed of Chicago, Austan Goolsbee, warned that the new tariffs would complicate the bank’s inflation projections and could force those responsible for policies to adopt a more cautious vision on the increases of interest rates and delay the flexibility measures that Trump is asking for.
The calendar is scarce today, and investors could be tempted to observe from the band line, waiting for the US CPI figures on Tuesday to obtain more clues about the short -term decisions of the Fed. On Thursday, the national CPI of Japan could help evaluate the possibilities of a greater hardening of the BOJ in the coming months.
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.
