The mighty dollar is sliding sharply as President Donald Trump\u2019s turbulent trade agenda has battered US credibility in global markets and fanned fears of a self-inflicted economic downturn.<\/p>\n\n\n\n
The US currency fell by another two percent on Friday to hit a three-year low against the euro to $1.14, before paring back some losses.<\/p>\n\n\n\n
A weaker dollar could drive inflation in the United States by making imports more expensive, squeeze the profit margins of companies and make US markets less attractive to foreign investors.<\/p>\n\n\n\n
It has been a sharp reversal of fortune for the greenback, which had soared in the wake of Trump\u2019s November election victory.<\/p>\n\n\n\n
Back then, there was talk that the dollar\u2019s ascent could bring the euro down to parity with the US currency as investors welcomed Trump\u2019s plans for tax cuts and smaller government.<\/p>\n\n\n\n
\u201cThe US was really at its peak,\u201d recalled Adam Button of ForexLive. \u201cNow it\u2019s slipping in dramatic fashion.\u201d<\/p>\n\n\n\n
The euros has gained almost 10 percent against the dollar since Trump returned to the White House on January 20, when the currencies stood near parity at $1.04.<\/p>\n\n\n\n
It was rocked in recent days by Trump\u2019s stop-start tariffs announcements: The US leader announced universal duties last week, only to implement but quickly remove some of the harshest ones this week.<\/p>\n\n\n\n
\u201cWe don\u2019t have a lot of trade wars to look back on, especially in the last 90 years,\u201d Button said. \u201cSo modern markets have never dealt with this kind of shock.\u201d<\/p>\n\n\n\n
\u2013 \u2018Damage done\u2019 \u2013<\/p>\n\n\n\n
George Saravelos, global head of foreign exchange research at Deutsche Bank, said that despite Trump\u2019s tariffs U-turn, \u201cthe damage to the USD (dollar) has been done\u201d.<\/p>\n\n\n\n
\u201cThe market is re-assessing the structural attractiveness of the dollar as the world\u2019s global reserve currency and is undergoing a process of rapid de-dollarization,\u201d Saravelos said in a note to clients.<\/p>\n\n\n\n
While Trump froze higher tariffs on scores of countries this week, he left a 10 percent universal duty that went into effect last week in place.<\/p>\n\n\n\n
At the same time, he escalated a trade war with China, applying a 145 percent levy on goods from the world\u2019s second biggest economy, which retaliated on Friday with a 125 percent levy on US goods.<\/p>\n\n\n\n
Some other Trump tariffs have also had staying power, such as sectoral levies on auto imports, steel and aluminium.<\/p>\n\n\n\n
\u201cGlobal recession is now our baseline forecast as higher tariffs and retaliatory measures take hold,\u201d said a JPMorgan Chase research note released Monday.<\/p>\n\n\n\n
\u2013 Still strong \u2013<\/p>\n\n\n\n
Amid the unrest in financial markets, investors have turned to other assets such as gold and the Swiss franc, which have soared higher.<\/p>\n\n\n\n
The movement against the dollar is \u201ca bit of a momentum trade and a bit of an acknowledgement that the tone of US exceptionalism is being peeled back,\u201d said Briefing.com analyst Patrick O\u2019Hare.<\/p>\n\n\n\n
\u201cYou have foreign investors who are losing confidence in their US investments because of the policy volatility,\u201d O\u2019Hare added.<\/p>\n\n\n\n
Market watchers say it is too early to say whether the recent decline in the greenback portends any deeper shift. <\/p>\n\n\n\n
The long-term health of the dollar is an evergreen topic of debate, and the currency has endured earlier moments of doubt.<\/p>\n\n\n\n
O\u2019Hare noted that the dollar is still \u201crelatively strong\u201d compared with its trading level at other times, including during the 2008 financial crisis.<\/p>\n","protected":false},"excerpt":{"rendered":"
The mighty dollar is sliding sharply as President Donald Trump\u2019s turbulent trade agenda has battered US credibility in global markets and fanned fears of a self-inflicted economic downturn. The US currency fell by another two percent on Friday to hit a three-year low against the euro to $1.14, before paring back some losses. A weaker […]<\/p>\n","protected":false},"author":1,"featured_media":8543,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[220],"tags":[3646,3645,1219],"class_list":["post-8542","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-dollar","tag-trade","tag-trump"],"_links":{"self":[{"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=\/wp\/v2\/posts\/8542","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8542"}],"version-history":[{"count":1,"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=\/wp\/v2\/posts\/8542\/revisions"}],"predecessor-version":[{"id":8544,"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=\/wp\/v2\/posts\/8542\/revisions\/8544"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=\/wp\/v2\/media\/8543"}],"wp:attachment":[{"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8542"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8542"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8542"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}