The pricing move staved off a rout in oil after a simultaneous decision by eight OPEC+ nations to increase supply more rapidly than expected, adding 548,000 barrels a day in August, with more expected in September. Information is provided ‘as is’ and solely for informational purposes, not for trading purposes or advice. For exchange delays and terms of use, please read disclaimer (will open in new tab). Events such as administration statements, budgets, new laws and regulations or fiscal policy can increase or decrease the value of the DXY. Now, “we are in a little bit of uncertain territory,” Erten says, and governments and investors are looking into ways of becoming less economically reliant on the U.S.
Meanwhile, China has started to elevate the status of its currency, the renminbi, by creating currency swap deals with countries like Brazil. BofA analysts agree that the mainstream adoption of Treasury-backed stablecoins, which they expect will eventually offer interest in some form, is likely to boost the demand for U.S. government debt and, thus, augment dollar demand. Treasury to lower its interest expenses by issuing more short-term Treasurys, which have lower coupon rates than long-term debt. The Bank of America analysts added that many international investors are reallocating their investment choices to their home markets, especially in Europe, “for policy stability” and “patriotic” reasons.
The dollar is the international reserve asset, and almost every other country holds dollars in their financial portfolio to the point that 59% of all reserve currencies in the world are in U.S. dollars. Treasurys and the dollar both tumbled in the days after Trump unveiled his “Liberation Day” tariffs, “a very unusual pattern,” former Treasury Secretary Janet Yellen said at the time. The dynamic, Yellen said, suggested international investors were shunning dollar-based assets and questioning Treasury debt’s role as the bedrock of global finance. Others speculated that China was dumping its Treasurys in retaliation for Trump’s tariffs. NBFI-controlled assets more than doubled between 2009 ($28 trillion) and 2022 ($63 trillion), according to BofA. “We see this rapid growth as reflecting strong demand for dollars,” the analysts wrote.
As the dollar has declined and the euro has strengthened, there are compelling opportunities to diversify and invest overseas, said Jason Blackwell, chief investment strategist at Focus Partners Wealth. That’s 17% more than the same month last year, signalling that at least part of the increase was the result of higher volume given prices rose 11% on average over the same period. The United States will impose 25% blanket tariffs on imports from Japan and South Korea starting August 1, President Donald Trump revealed Monday. The chief executive officer announced over the weekend that he’ll take on Republicans and Democrats with the “America Party,” focusing on House and Senate seats for the next 12 months. After that, backing a candidate for president isn’t out of the question, Musk wrote on X. Copper and other industrial metals extended losses after US President Donald Trump injected fresh uncertainty into his trade agenda with a pledge to impose a 10% tariff on countries aligned with the BRICS bloc of nations.
Related: UK signs first trade agreement with US since Trump’s ‘Liberation Day.’ These experts look at what it achieved
The won plunged as much as 1.1% to trade at 1,378 per dollar, the lowest in two weeks, after Trump announced the trade levy in a social media post. Shares for the $4.95 billion iShares MSCI South Korea (EWY) fell 3.6%, the most since April. South Korean assets plunged to session lows after President Donald Trump announced a 25% tariff on the nation’s goods, ratcheting up tension with one of the most important trading partners to the US. West Texas Intermediate, the US crude oil benchmark, is trading around $66.85 during the early Asian trading hours on Tuesday. The WTI price edges lower amid oversupply concerns triggered by the July 6 Organization of the Petroleum Exporting Countries and allies meeting.
Currency trading: Difference between forex and currency index tickers
The value of a currency oscillates consistently largely based on confidence in a country’s economic growth, fears around economic factors like inflation and policies implemented by governments and banks. But Erten attributes the current value of the dollar to fallout from the Trump administration’s tariffs, trade wars and tax cuts proposed in the so-called “Big Beautiful Bill” that could increase the federal deficit by trillions of dollars. Evidence of a global distaste for U.S. assets has shown up in the stock, bond, and foreign exchange markets. U.S. stocks severely underperformed equities in most developed markets in the first months of Trump’s second term as trade policy threatened to slow U.S. growth.
DXY news
- Many trading systems utilize moving averages as independent variables and market analysts frequently use moving averages to confirm technical breakouts.
- The impact will extend to most imported goods, home mortgage costs and car payments as well should bond yields continue to increase and the dollar value plummet even further.
- A number of factors contribute to the value of the U.S. dollar, among them how in demand it is from central banks and other financial institutions.
- After each calculation the program assigns a Buy, Sell, or Hold value with the study, depending on where the price lies in reference to the common interpretation of the study.
- US-traded shares of Toyota Motor dropped more than 4%, while Honda Motor shares slid nearly 4%.
Companies that export U.S. goods, however, may benefit from a more competitive edge. The dollar’s lowering value means that the cost of American goods and services will decrease in price when taking into account the exchange rates. “Investors don’t like uncertainty,” Eichengreen said, noting the negative impact on the dollar. While uncertainty around the US economy has increased, the European economy — though facing its own headwinds from tariffs — has emerged as relatively more stable. Yet the dollar had broadly weakened this year as Trump’s tariffs — and his back-and-forth decisions on implementing them, pausing them, raising them and lowering them — have injected uncertainty into markets and clouded the outlook for the US economy.
Stablecoins Could Boost Dollar Demand
For Europe, which competes with other nations for liquefied natural gas cargoes, a further drop in prices could help ease its efforts to replenish fuel stockpiles ahead of next winter. Imports from at least seven countries will face steep tariffs beginning Aug. 1, Trump revealed in a series of Truth Social posts on Monday. Trump shared screenshots of signed form letters to the leaders of South Korea, Japan, Malaysia, Kazakhstan, South Africa, Laos and Myanmar, that dictated new tariff rates for each nation. Gold price attracts fresh sellers amid diminishing odds for a rate cut by the Fed in July.
West Texas Intermediate crude advanced more than 1% to settle just below $68 a barrel, erasing earlier losses, while Brent settled above $69 a barrel. Saudi state producer Aramco will raise the price for Arab Light crude, its flagship grade, by $1 a barrel to $2.20 a barrel more than the regional benchmark for Asian customers in August, according to a sheet from the company seen by Bloomberg. Investing in stocks is an art, not a science, and people who’ve been trained to rigidly quantify everything have a big disadvantage. USDX goes up when the US dollar gains “strength” (value) when compared to other currencies.
The simplest explanation for the decline is that global investors now expect the U.S. economy to no longer outperform the rest of the world as a result of Trump’s tariffs and worsening fiscal issues. Even with U.S. stocks returning to record highs, the return on other countries’ equities has been even stronger. Meanwhile the return on lending to the U.S. is expected to decline as growth here slows. The Fed has faced pressure from Trump to lower borrowing costs, but has stopped short of doing so in order to assess the potential impact Berkshire Hathaway of the President’s tariffs and keep unemployment low.
For example, a price above its moving average is generally considered an upward trend or a buy. The impact will extend to most imported goods, home mortgage costs and car payments as well should bond yields continue to increase and the dollar value plummet even further. However, Erten says U.S. exporters might get a boost as American goods become cheaper abroad. As a result, a weakened dollar could potentially narrow the federal deficit, although Erten is uncertain it will have that much of a positive effect.
President Donald Trump announced Monday that the US would hit products from Japan and South Korea with 25% tariffs, sending shares of Toyota and Honda down. Treasury Secretary Scott Bessent said Monday that the US will make several trade announcements in the next 48 hours. The first announcement from Trump placed tariffs of at least 25% on goods from Japan and South Korea starting August 1. Details on sectoral tariffs geared toward boosting US industrial production, including of aluminum, steel and copper, are still under discussion.
The US-listed shares of South Korean companies SK Telecom and LG Display slid in midday trading following President Donald Trump’s announcement of 25% on the country. Brazilian President Luiz Inacio Lula da Silva joined South Africa in blasting Donald Trump for his threat to slap extra tariffs against the BRICS, escalating a spat with the US leader during the final day of hosting the 10-member group. Netblocks, a London-based internet watchdog organization, said a “major” disruption had been registered in Egypt. “Network data show national connectivity at 62% of ordinary levels” after the fire was reported, it said in a post on X.
- Monday in New York, wiping out $16.7 billion from his net worth, according to the Bloomberg Billionaires Index.
- But Erten attributes the current value of the dollar to fallout from the Trump administration’s tariffs, trade wars and tax cuts proposed in the so-called “Big Beautiful Bill” that could increase the federal deficit by trillions of dollars.
- Meanwhile, there have been more appealing investment opportunities in Europe.
- Gold price attracts fresh sellers amid diminishing odds for a rate cut by the Fed in July.
“It had reached a high we had only seen in 2002 and 1985 and both of those times, it fell very sharply in the ensuing years,” he says. The dollar most recently saw a spike in value around 2015, though it deteriorated during the COVID-19 pandemic, before rising again. Its recent high rate meant that it was projected to fall in the years to come, according to Rogoff.