Dollar Surges as Tariff Concerns Resurface After Trump and Treasury Secretary's Comments
The US dollar strengthened significantly against major currencies after President Donald Trump and Treasury Secretary Scott Bessent's remarks sparked concerns about renewed trade tensions.
* High-Risk Currencies Plunge: Risk-sensitive currencies like the Australian and New Zealand dollars fell by 0.7% against the dollar, while the Thai baht dropped by 0.8%, leading losses in emerging Asia.
* Yuan Dips: China's offshore yuan depreciated by over 0.3% against the greenback.
* Tariffs Back in Focus: Bessent's support for gradual universal tariffs on US imports, starting at 2.5%, and Trump's comments on considering tariffs on a wide range of goods including steel, copper, and semiconductors, have brought tariffs back to the forefront.
* Dollar Gauge Rises: Bloomberg's US currency gauge climbed by 0.4% as investors piled into bullish dollar positions.
* Dollar Surge Continues: Despite signs of exhaustion in dollar positions, the greenback has appreciated by over 7% in the last quarter of 2024 due to expectations of trade tensions and elevated US interest rates.
* Uncertainty and Volatility: Trump's tariff announcement has revived concerns and reinforced expectations for dollar strength and volatility in currency markets.