The U.S. dollar experienced fluctuations against major currencies, reaching a decade-low against the Swiss franc. This currency movement followed President Donald Trump's unexpected decision to reverse tariffs. Initially, Trump had imposed steep duties on trading partners but later announced a 90-day freeze on these tariffs while maintaining a 10% duty on most countries.
For Chinese imports, tariffs increased to 125% as a response to China's 84% tariff on U.S. goods. Consequently, total U.S. duties on Chinese imports now stand at 145%. The dollar initially rebounded against the Swiss franc and Japanese yen, with Wall Street indexes rising due to the tariff reprieve. However, the dollar then declined by 2% to 144.795 yen and 3.6% to 0.82635 Swiss francs, leading to a drop in the S&P 500, Dow, and Nasdaq indexes.
This month, the dollar has fallen by 3.46% against the yen and nearly 6.5% against the Swiss franc, marking the largest one-day loss since January 2015. Eugene Epstein from Moneycorp noted, "Up until yesterday's 90-day reprieve, there was a pretty large dislocation in the market, across all markets in fact, and full adjusting to the tariff regime. But now that there's a pause, every adjustment is basically being re-readjusted."
In Europe, the euro rose 2.47% to $1.1221, while the pound increased 1.13% to $1.29720. The Australian dollar and Swedish crown also strengthened. China's central bank adjusted the yuan rate, signaling a gradual depreciation. Investors are monitoring potential currency depreciation as part of the trade war strategy.
Source: Reuters