Dollar Sets Six-Month Low on Tariff Worries
The dollar fell for a fifth straight day, touching a six-month low, as investors reassessed the greenback’s role as a haven amid concerns over slowing US growth amid President Donald Trump’s fast-evolving trade policy.
The Bloomberg Dollar Spot Index was down 0.2% and touched its weakest since Oct. 2. It’s down about 3.4% this month. The gauge hasn’t dropped four straight months since the period ending January 2023
BBDXY vol skew remains bearish across tenors; 10-year US Treasury yield down 8 basis points to 4.4%
Dollar fails to rebound even as stocks rise, suggesting uncertainty over US trade policy is translating into a confidence crisis in the currency
“We expect weakness to resume as risks to global growth remain high regardless of the tariff pause,” wrote BBH strategists Win Thin and Elias Haddad. “We also believe that this post-pause dollar weakness is due in large part to a growing loss of confidence in US policymakers as well as the negative impact of policy uncertainty on the U.S. economy.”
EUR/USD steady at 1.1359; one-week risk reversals at 138bps, calls over put.
GBP/USD rose 0.75% to 1.3187; overnight vol rose earlier to 20.85%, highest since Jan. 9, as traders also focus on UK jobs data due Tuesday
“As a reserve currency, sterling is participating in this de-rating of the dollar,” wrote ING strategist Chris Turner. “But euro liquidity is higher than sterling, and there is probably much more repatriation of financial assets into the eurozone than into the UK, given the bloc’s large trade surplus with the US.”
USD/JPY gained 0.1% to 143.41
USD/CHF rose 1.3% to 0.8256
USD/CAD little changed at 1.3882
Source : Bloomberg
