With Trump's tariffs endangering international trade, the dollar rises on risk aversion.
Investors are on edge due to uncertainty around the scope and timing of US taxes.
The US dollar is further supported by solid US job data and waning expectations of Fed cuts.
On Monday, the US dollar is among the top-performing major currencies. Given that the US is expected to impose import tariffs today, investors' risk aversion is a result of mounting fears about global trade.
The US Dollar Index (DXY), which compares the value of the US dollar to a basket of the most traded currencies, has risen to the upper 96.00s, separating itself from the long-term lows of the previous week. It is now just below 96.00 and getting close to a crucial resistance level, which is at 97.00.
Risk aversion has increased due to US tariffs.
On the weekend, Trump stated that he would write letters on Monday informing nations that did not cut agreements with the US that they would be subject to the April 2 penalties. However, the exact date is uncertain because US government representatives have alluded to August 1 in a likely follow-up ban to the original July 9.
As the US dollar rises in tandem with US Treasury yields, investors' appetite for risk is being negatively impacted by the ongoing uncertainty surrounding the majority of US government activities as well as fresh worries about the detrimental effects of tariffs on global economy.
Although this week's US schedule is sparse, last week's robust US Nonfarm Payrolls data allayed worries about the US economy and dashed expectations of July Fed cuts. This is probably going to give the US dollar more momentum, at least until the minutes of the most recent Fed meeting are released, which is scheduled for next Wednesday. The minutes may show some disagreement within the committee.
Investors are on edge due to uncertainty around the scope and timing of US taxes.
The US dollar is further supported by solid US job data and waning expectations of Fed cuts.
On Monday, the US dollar is among the top-performing major currencies. Given that the US is expected to impose import tariffs today, investors' risk aversion is a result of mounting fears about global trade.
The US Dollar Index (DXY), which compares the value of the US dollar to a basket of the most traded currencies, has risen to the upper 96.00s, separating itself from the long-term lows of the previous week. It is now just below 96.00 and getting close to a crucial resistance level, which is at 97.00.
Risk aversion has increased due to US tariffs.
On the weekend, Trump stated that he would write letters on Monday informing nations that did not cut agreements with the US that they would be subject to the April 2 penalties. However, the exact date is uncertain because US government representatives have alluded to August 1 in a likely follow-up ban to the original July 9.
As the US dollar rises in tandem with US Treasury yields, investors' appetite for risk is being negatively impacted by the ongoing uncertainty surrounding the majority of US government activities as well as fresh worries about the detrimental effects of tariffs on global economy.
Although this week's US schedule is sparse, last week's robust US Nonfarm Payrolls data allayed worries about the US economy and dashed expectations of July Fed cuts. This is probably going to give the US dollar more momentum, at least until the minutes of the most recent Fed meeting are released, which is scheduled for next Wednesday. The minutes may show some disagreement within the committee.
