Ahead of Trump Speech, Dollar Pressures Euro & Franc
The US dollar strengthened in trading on Wednesday (January 21st) after hitting a three-week low against the euro and Swiss franc. This strengthening occurred as investors awaited US President Donald Trump's speech at the World Economic Forum in Davos. Previously, Trump's latest tariff threats triggered a massive sell-off of US assets and rocked global markets.
Market pressure has been mounting since the beginning of the week, when the Greenland issue rekindled the "Sell America" sentiment. The euro rose more than 1% in the past two days before weakening slightly to $1.1710. Meanwhile, the Swiss franc, a safe-haven asset, also fell against the dollar after posting a sharp gain earlier in the week.
Geopolitical tensions remain a major concern for investors. Several analysts believe the future of US-European relations depends heavily on the outcome of the Davos talks. The European Union is even said to be considering retaliatory trade measures if US pressure continues, including restrictions on American companies and services.
In Asia, the Japanese yen is also under pressure due to the surge in Japanese government bond yields to all-time highs. Concerns about looser fiscal policy ahead of the midterm elections prompted investors to sell the yen. The Japanese currency was recorded near its weakest level against the euro and Swiss franc.
Meanwhile, the Chinese yuan weakened slightly against the dollar after the Chinese central bank set a slightly weaker mid-rate. This move was seen as a signal that authorities wanted to keep the yuan stable around the psychological level of 7 per dollar. Overall, global currency markets remained cautious, awaiting policy direction and key statements from Davos. (alg)
Source: Newsmaker.id
