Due to the customs war, the dollar fell to the lowest level in three years

The dollar index, which shows the value of the US according to the six of the world’s most important currencies, sank 3 percent last week, to 99.78 points, the lowest level in three years.

The euro course jumped 3.6 percent to $ 1,1355, the highest level since February 2022.

The US currency also weakened towards Japanese, by 2.3 percent, so its price dived to 143.50 yen.

A sharp decline in a dollar course for the second week in a row is a consequence of customs insecurity, which US President Donald Trump announces a little, delaying a little, and increases them from China …

Eskallation of the Customs War

Last Wednesday, Trump unexpectedly delayed additional, reciprocal customs for all countries, except China, but left a 10 percent basic customs duties on almost all imported imports.

After that Trump’s decision, many countries said they were ready to negotiate. Among other things, the European Union, which has delayed its countermeasures on Trump’s customs.

But the customs war between Washington and Beijing continues as Trump increased the total customs rate on the import of Chinese goods to 145 percent. China, however, has increased customs duties to an import of US goods to a total of 125 percent.

This escalation of the customs war between the two largest economies in the world could cause disorders in the procurement of chains and international trade, the growth of inflation and slowing the growth of the global economy, and even the recession.

The dollar otherwise is known for one of the safe currencies in an insecure times, but as the US economy threatens to slow down growth and even recession, the dollar found itself under pressure, while significantly strengthened by the Japanese and Switzerland currency, which are also considered to be a safer refuge for capital in uncertain times.

The ‘Swiss’ course towards the dollar has reached the highest level in more than 10 years.

Sale of US bonds

The dollar is under pressure and due to increased sale of US government bonds, which is why the yields on 10-year bonds reached about 4.5 percent. This is a weekly yield growth for 40 base points, which has not been recorded since 2001.

The decline in the dollar, along with the fall of Wall Street and US government bonds, may mean that foreign investors on Trump’s protectionist measures are responsible for sale of US assets, analysts say.

« An obvious exodus from US property. The decline in dollars is not only a consequence of assessment of the growth of the American economy and trade instability. There is something more, it is a decline in the dollar and credibility of US policies. So far, in periods of non -exhibit, the dollar has strengthened the dollar as a safe currency, but now it is a dollar. explains Win Thin, a strategist at Brown Brothers Harriman.