Tuesday, 02 January 2024 12:17 GMT

The US Dollar Extended Losses Amid Trade Policy Risks


(MENAFN- Investor Ideas) Investorideas, rated as a top 100 investment website for investment issues market commentary from Konstantinos Chrysikos Head of Customer Relationship Management at Kudotrade.


The US Dollar started the week in the red, hovering near a three-year low, as investors grappled with conflicting signals from Washington on trade policy. While President Trump announced a tariff exemption for smartphones, computers, and other tech products under the new "reciprocal" regime, Commerce Secretary Howard Lutnick later clarified that these items could still face new levies within two months.

The lack of clarity, combined with Beijing's move to raise tariffs on US goods, has reinforced fears of a prolonged US-China trade war. As such, the greenback's short-term outlook could remain clouded.

Meanwhile, the 10-year US Treasury note hovered below 4.5% after last week's sharp rise, reflecting a broader reassessment of US assets. Friday's sharp drop in consumer sentiment, which fell to its lowest level in several years, added to concerns about weakening demand and persistent inflationary pressures.

Looking ahead, this week's data on retail sales, housing activity, and jobless claims may help shape expectations for the Fed's next move. Weak readings could reinforce dovish bets and deepen downside risks for the currency

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