Trump’s Steep Tariff Plan Sends U.S Dollar Down
The U.S. dollar traded down during the Monday trading session in Asia. The greenback was down from last Friday’s trading session after the announcement of U.S. President Donald Trump’s tariff proposals. Trump’s tariff plan proposes placing stiff tariffs on imports of steel and aluminum.
The U.S. currency has traded higher over the past month being boosted by the upbeat inflation data and consumer prices. These led to growing speculations of an announcement from the U.S. Federal Reserve regarding interest rate hikes this year. This was confirmed indirectly by the new Federal Reserve chairman Jerome Powell who testified before the congress for the first time last week.
According to Powell, the Fed is still on track and considering a couple more interest rate hikes this year. This pushed the dollar higher and on a more positive territory before it slipped slightly over the past due to the U.S. bond yield decline.
The markets then became wary of the currency’s movement despite the bullish movement caused by short-term Treasury yields as well as the current outlook of Federal Reserve policymakers regarding the interest rates this year.
Late last week, President Trump announced that he plans on imposing a tariff of 25% on import steel products and a 10% tariff on aluminum imports by as early as the coming week. This raised concerns that the proposed tariffs would lead to a trade war potentially hurting the economy of the country.
Analysts have raised their concerns on the tariffs threatening the economy of the United States and its current status as it risks other assets in the country. Others have also stated that this may lead into the economic growth being dampened as the introduction of tariffs also threatens the prices of foreign products in the country being higher therefore cutting down the demand for imports. The biggest risks of the tariffs are also centered on the currency with capital flows possibly coming up. Analysts have also warned against the market sentiment continues to remain on the negative side.
During the trading session at the end of last week, the U.S. dollar was down with the dollar index trading 0.41% lower against six other major currencies. The Euro traded higher against the USD by 1.2332 from previously trading at 1.2254 during the prior trading session. The British pound was also higher against the dollar during the same trading session to 1.3791.
Trump’s announcement have also caused a reaction in the international market. Canadian foreign affairs minister Chrystia Freeland stated that the country would be taking responsive measures in defending its trade interests and workers. China’s response, on the other hand, despite having only a minor share of U.S. steel imports, will be closely watched by the markets.
The U.S. Remains to be one of the largest economies in the world. However, its recent expansion have caused a dent on the budget of the country largely attributed to the tax overhaul and fiscal stimulus by the Trump administration.
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The U.S. currency has traded higher over the past month being boosted by the upbeat inflation data and consumer prices. These led to growing speculations of an announcement from the U.S. Federal Reserve regarding interest rate hikes this year. This was confirmed indirectly by the new Federal Reserve chairman Jerome Powell who testified before the congress for the first time last week.
According to Powell, the Fed is still on track and considering a couple more interest rate hikes this year. This pushed the dollar higher and on a more positive territory before it slipped slightly over the past due to the U.S. bond yield decline.
The markets then became wary of the currency’s movement despite the bullish movement caused by short-term Treasury yields as well as the current outlook of Federal Reserve policymakers regarding the interest rates this year.
Late last week, President Trump announced that he plans on imposing a tariff of 25% on import steel products and a 10% tariff on aluminum imports by as early as the coming week. This raised concerns that the proposed tariffs would lead to a trade war potentially hurting the economy of the country.
Analysts have raised their concerns on the tariffs threatening the economy of the United States and its current status as it risks other assets in the country. Others have also stated that this may lead into the economic growth being dampened as the introduction of tariffs also threatens the prices of foreign products in the country being higher therefore cutting down the demand for imports. The biggest risks of the tariffs are also centered on the currency with capital flows possibly coming up. Analysts have also warned against the market sentiment continues to remain on the negative side.
During the trading session at the end of last week, the U.S. dollar was down with the dollar index trading 0.41% lower against six other major currencies. The Euro traded higher against the USD by 1.2332 from previously trading at 1.2254 during the prior trading session. The British pound was also higher against the dollar during the same trading session to 1.3791.
Trump’s announcement have also caused a reaction in the international market. Canadian foreign affairs minister Chrystia Freeland stated that the country would be taking responsive measures in defending its trade interests and workers. China’s response, on the other hand, despite having only a minor share of U.S. steel imports, will be closely watched by the markets.
The U.S. Remains to be one of the largest economies in the world. However, its recent expansion have caused a dent on the budget of the country largely attributed to the tax overhaul and fiscal stimulus by the Trump administration.
FSMSmart gives you the latest news updates, market trends, and news about forex, commodities, stocks and many more! Open an account now and learn more about other investment opportunities on FSM Smart.
Trump’s Steep Tariff Plan Sends U.S Dollar Down
Reviewed by fsmsmart
on
March 05, 2018
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Reviewed by fsmsmart
on
March 05, 2018
Rating:
