Investors hide under U.S dollar Umbrella

Investors flocked to safe havens like the dollar, yen, and Swiss franc as concerns about a global recession increased following President Donald Trump’s sweeping tariffs on trading partners.

Global markets plummeted, with Wall Street stocks trading lower after Asian shares fell, as investors speculated that the rising risk of a severe economic downturn could lead to a cut in U.S. interest rates as early as May.

The dollar slightly recovered against other safe-haven currencies, rising 0.50% against the yen to 147.605 after initially tumbling more than 1.4% earlier in the session. It also reached a six-month low against the Swiss franc.

The euro rose by 70 basis points to $1.1050 earlier in the session but was down 0.39% at $1.091775.

The euro has performed well over the past few days since the tariff news. The greenback’s status seems weakened as the uncertainty surrounding tariffs and their effects on U.S. growth escalates while the dollar is usually regarded as a safe-haven asset.

European Union nations are expected to present a united front against Trump’s tariffs in the coming days, an initial set of targeted countermeasures on up to $28 billion worth of U.S. imports, spanning items from dental floss to diamonds.

Sterling dropped to a one-month low at $1.27465 and was last down 1.05% against the greenback.

The Aussie, often viewed as a proxy for risk appetite, plummeted to a five-year low earlier in the session but recovered slightly to be last, down 0.51% at $0.601.

The New Zealand dollar fell 0.86% to $0.5547 after sliding more than 1% earlier in the session.

Trump’s tariff announcements erased nearly $6 trillion from U.S. stocks this month.. When asked about the consequences, Trump remarked on Sunday that sometimes “medicine” was necessary to remedy situations, adding he was not purposely causing a market selloff.

Over 50 nations have approached the White House to initiate trade talks. China, which has responded with countermeasures, including a 34% levy on all U.S. goods, stated that “the market has spoken.”
Meanwhile, traders have increased bets for more Federal Reserve rate cuts this year, believing policymakers must support growth in the world’s largest economy.

ABOUT THE AUTHOR See More

Olumide Adesina

Financial Market Writer

Olumide Adesina is a French-born Nigerian financial writer. He tracks the financial markets with over 15 years of working experience in investment trading.

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