Yen and Swiss Franc Surge on Tariff and Growth Worries
The Japanese yen and the Swiss franc strengthened against the U.S. dollar on Monday, as traders flocked to safe-haven currencies due to persistent concerns over tariffs and a slowing U.S. economy.
Meanwhile, the euro stabilized after last week’s strong rally. Following a volatile week in which the euro posted its largest weekly gain since 2009 after Germany’s tax reform, the common currency edged up 0.1% against the dollar, approaching a four-month high as markets awaited details on European spending plans.
Markets remain fixated on trade tensions, as U.S. President Donald Trump imposed tariffs on key trading partners but postponed some for a month amid fears of an economic slowdown in the U.S.
Risk-averse investors have turned to the Japanese yen and the Swiss franc, pushing both currencies to multi-month highs. On Monday, the yen rose 0.58% to 147.19 per dollar, just below Friday’s five-month high of 146.94.
The market anticipates that the Bank of Japan will keep interest rates unchanged in its upcoming policy review on March 18-19.
Swiss Franc
The Swiss franc also climbed to a three-month high of 0.87665 per dollar on Monday.
The U.S. dollar index, which measures the greenback’s performance against a basket of six major currencies, stood at 103.98 points, near the four-month low reached last week.
Last week, the dollar fell more than 3% against its major peers, marking its worst weekly performance since November 2022.
Investor focus now shifts to U.S. inflation data set for release on Wednesday.
According to LSEG data, traders expect the Federal Reserve to implement 75 basis points in rate cuts this year, with a first cut fully priced in for June.
Meanwhile, the Chinese yuan weakened on Monday after weekend data showed that consumer prices fell in February at the sharpest pace in 13 months.
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