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Trump sends tariff threats again, dollar hits a month low
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Platform]: Trump once again issued a tariff threat, and the US dollar fell to a new low in a month." Hope it will be helpful to you! The original content is as follows:
On the Asian session on Monday, the US dollar index fluctuated and fell, and the US dollar fell across the board last Friday, after US President Trump once again threatened to escalate the trade war and suggested that a 50% tariff was imposed on the EU from June 1, and investors sold the US dollar one after another. This has once again raised concerns about the impact of tariffs on the world economy and global trade. The focus will be on the speech of the European Central Bank President Lagarde at the Herti Academy in Berlin during the day, and the European Central Bank Administration Nagel made a speech.
Analysis of major currency trends
Dollar: As of press time, the U.S. dollar index hovers around 99, and market participants will pay attention to eouu.cnments from Fed officials, as well as minutes of FOMC meetings, preliminary first-quarter GDP, core PCE price index, personal income and expenditure, durable goods orders, and eouu.cnmodity trade balance. These data will be released this week to obtain new clues about the U.S. economic outlook and monetary policy direction. The daily chart of the US dollar index shows a significant downward trend. The adjustment of the exchange rate since the high of 109.8799 has evolved into a medium-term downward trend, and is currently testing key support areas around 99.20. From the analysis of the K-line pattern, the exchange rate has been falling below multiple important support levels, including the previous 100 integer mark, indicating strong bear momentum.
1. Trump went back on his word several times. Experts: Trade partners bet that they are just "good at mouth".
IBD columnist pointed out that Trump gave a 90-day suspension period of reciprocal tariffs on April 9. However, when the suspension period was halfway, the United States only reached a preliminary agreement with the United Kingdom. Although Trump's recent trade attitude has turned to appease the market, what will happen after the 90-day suspension period of reciprocal tariffs ended? Trump said last week that it may be with the United States before the July 8 deadline. There are relatively few countries that have reached an agreement. He said that trading partners should receive a letter in the next two to three weeks stating "what they will pay for doing business in the United States." Bescent said on May 18 that countries that are not sincerely negotiating will face reciprocal tariffs at the "April 2 level". He also raised the possibility of imposing regional tariffs rather than levied by country. But after Trump's several reversals, trading partners may be betting that Trump will only perform "mouth effort" again and will not take action.
2. Ukrainian bonds are sluggish due to the peace process. Markets of neighboring Eastern European countries soar
Ukrainian dollar bonds have caused investors more than 10% losses so far in 2025, the worst performing in emerging and cutting-edge markets. And at the beginning of the year, some Ukrainian bond prices have almost doubled since reorganization in August last year and boosted the entire Eastern European market. London hedge fund FrontierRoad has turned to corporate bonds to avoid geopolitical risks. Although Bank of America maintained its over-allocation recommendation, it warned of the "downside risks" brought by the continued war. Morgan Stanley expects the conflict to continue until 2025. "The market has fallen back to pre-Trump's election level," said Viktor Szabo, director of Amber Investment. The major stock indexes of Warsaw, Prague and Budapest all exceeded 30% in the US dollar during the year, with Hungarian forin, Czech Krone and Polish Zloty leading the rise in emerging market currencies. But the price of Ukraine's zero-interest bonds due in 2035 has fallen to 50 cents from 70 cents in February.
3. Japanese tariff negotiator: Hope to meet with the US Treasury Secretary in the next talks
Japanese Economic Regeneration Minister Ryomasa Akazawa said on Sunday that the schedule for the next round of Japan-US trade negotiations will begin next week. Talks are still being arranged and he hopes to meet with U.S. Treasury Secretary Besent during his next visit. According to reports, Ryo Akasawa had just returned from Washington and spoke to reporters at Haneda Airport. He said an agreement will only be reached after all the problems are resolved as a whole. This means that nothing is reached until all issues are agreed upon. “So, I won’t eouu.cnment on how much progress we have made,” he said.
4. Poll: 56% of Americans say tariffs have increased the financial burden of families
People data from American institutions show that more than half of Americans say that the tariffs imposed by US President Trump on other countries have had a negative impact on their family financial situation. The survey data shows: "Most (56%) of adult Americans believe that if Trump's tariffs are not implemented, their families' financial situation will be better." The survey data shows that about 52% of respondents believe that the (government) promised economic benefits cannot offset economic losses. About 49% of respondents believe that imposing tariffs will have a negative impact on the US economy. According to the agency, 69% of American residents believe that the expropriation will lead to rising prices of daily necessities. The report pointed out that Trump himself foresaw such consequences. He said that American children may only get "two dolls" instead of the past thirty, because the price of dolls will be "a few dollars more expensive."
5. Japan intends to reach a tariff agreement with the United States before the G7 summit in June
Japanese Economic Regeneration Minister Ryomasato Akasawa said that his goal is to resolve the tariff negotiations in a timely manner before US President Trump and Japanese Prime Minister Shigeru Ishiba's meeting in June. "The leaders of both countries are looking forward to their meeting, which has been confirmed," Akazawa Ryosuke told reporters after meeting with U.S. eouu.cnmerce Secretary Lutnik and U.S. Trade Representative Greer in Washington on Friday."We will keep this in mind and do our best. "Before his eouu.cnments, Trump and Shigeru Ishiba held a call, promising to meet during the G7 summit next month. Hours later, Trump said he agreed to a partnership between Nippon Steel and U.S. Steel (X.N).
Institutional Views
1. Mitsubishi UF: The yen should continue to be supported by the prospect of rate hikes
Mitsubishi UF analyst Derek Halpenny in a report The lawsuit said the yen should continue to be supported, as Japan's latest inflation data should keep the possibility of another rate hike later this year. He said that while expectations for the Bank of Japan's interest rate hike this year are not high, the Bank of Japan's expectations for a rate hike this year are also unique given the other G10 central banks cutting interest rates. This should put pressure on the dollar against the yen, as market participants are more confident about the prospect of further rate cuts by the Federal Reserve later this year. ”
2. Deutsche Bank: Deficit inflation is the next major structural burden for the dollar
After the U.S. House of Representatives passed Trump’s tax and expenditure bill on Thursday, concerns about rising U.S. government debt continued to put pressure on the dollar. eouu.cnmerzbank currency analyst Antje Praefcke said in a report that the bill was intended to permanentize the tax cuts introduced by Trump, but the funds provided for it are unstable, so it can be assumed that the budget deficit will continue to expand. She said: “I’m curious when the market will realize that this is the next major structural burden for the dollar. ”
3. ANZ: The RBI may cut interest rates three more times in 2025
The RBI research team said in a report that the RBI may cut interest rates three more times by the end of 2025. They wrote that given that inflation is not a problem at the moment, the current sluggish economic growth may mean that the RBI will need to continue to relax monetary policy. They added that if the GDP data for January-March is lower than expected, the RBI may not The above content is all about "[XM Forex Platform]: Trump once again issued a tariff threat, and the dollar fell to a new low in a month" was carefully eouu.cnpiled and edited by the editor of XM Forex. I hope it will be helpful to your trading! Thanks for your support!
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