US dollar deepens losses to six-month nadir on Trump tariffs
The US dollar tumbled in European trade on Thursday against a basket of major rivals, sharpening losses for a second day and hitting a six-month trough after Trump imposed aggressive reciprocal tariffs on the world.
The tariffs raised concerns about a US recession, which could prompt the Federal Reserve to accelerate its plans of rate cuts this year.
The Index
The dollar index fell 2.2% today to 101.37, the lowest since October 2024, with a session-high at 103.69.
On Wednesday, the index lost 0.5%, the first loss in three days as US yields declined.
US Tariffs
US President Donald Trump announced new historic reciprocal tariffs on many countries, that start with a base 10% and rise by many folds depending on the country.
He described the new tariffs as “a declaration of independence” and today as the “liberation day”.
He accused the world of “looting, pillaging, and raping the US for many years” on the economic trade fronts, with barriers being put in front of US companies worldwide.
US Yields
US 10-year treasury yields fell by 2.1% today on track for the fifth loss in a row, plumbing a six-month low at 4.051%.
It comes as investors brace for slower US growth, which could force the Fed to enact more interest rate cuts this year.
Gold hits fresh record high after Liberation Day tariffs
Gold prices rose in European trade on Thursday on track for the second profit in a row, hitting a record high and approaching $3200 for the first time ever.
It comes amid strong haven demand amid surging trade tensions following US President Donnald Trump’s new reciprocal tariffs announced yesterday.
The markets were shaken by the far more aggressive than expected US tariffs announced against China, Japan, and the EU and many other countries.
Prices
Gold prices rose 1.1% to $3167 an ounce, a record high, with a session-low at $3122.
On Sunday, gold rose 0.65% on Wednesday, the fourth profit in five days as both the dollar and US yields fell.
US Tariffs
US President Donald Trump announced new historic reciprocal tariffs on many countries, that start with a base 10% and rise by many folds depending on the country.
He described the new tariffs as “a declaration of independence” and today as the “liberation day”.
He accused the world of “looting, pillaging, and raping the US for many years” on the economic trade fronts, with barriers being put in front of US companies worldwide.
The new tariffs will stack on top of the 25% auto tariffs already announced a few days ago and will go into effect this week.
SPDR
Gold holdings at the SPDR Gold Trust rose 0.57 tons on Wednesday to a total of 931.94 tons.
Yen rushes to three-week high on Trump tariffs
The Japanese yen rallied in Asian trade on Thursday against major rivals, heading for the third profit in a row against the US dollar and scaling a three-week high on haven demand.
Global financial markets have been shaken by US President Donald Trump’s aggressive tariffs against the world economies, announced yesterday.
The yen is also bolstered by a tumble in US treasury yields amid a surge in bond purchases due to concerns about a recession.
The Price
The USD/JPY fell 1.4% today to 147.11, the lowest since March 11, with a session-high at 149.24.
The yen rose 0.25% on Wednesday, the second profit in a row on strong haven demand.
US Tariffs
Global financial markets are being sold off after Trump’s attempt to reshape global trade, which was more aggressive than expected.
Trump said he’ll impose a base 10% tariffs on all imports, with much higher rates on some major partners such as China and the EU.
Japan’s Aggressive Tariffs
The American tariffs on Japanese products were more aggressive than expected at 24%.
The Nikkei index tumbled to eight-month lows, with Japanese treasury yields tumbled by the biggest percentage point since August 2024.
US Yields
US 10-year treasury yields fell by 1.85% today on track for the fifth loss in a row, plumbing a six-month low at 4.051%.
It comes as investors brace for slower US growth, which could force the Fed to enact more interest rate cuts this year.
A reduced gap between long-term Japanese and US rates would boost the appeal of Japanese yields as an investment target, in turn underpinning the yen.
Trump signs historic reciprocal tariffs on all countries
US President Donald Trump announced new historic reciprocal tariffs on all world countries, that start with a base 10% and rise by many folds depending on the country.
He described the new tariffs as “a declaration of independence” and today as the “liberation day”.
He accused the world of “looting, pillaging, and raping the US for many years” on the economic trade fronts, with barriers being put in front of US companies worldwide.
The new tariffs will stack on top of the 25% auto tariffs already announced a few days ago and will go into effect this week.