USD softer as tariff concerns persist – Scotiabank
|The US Dollar (USD) is weaker as US equity futures dip in response to Treasury Secretary Bessent expressing no concern about recent equity market volatility and President Trump saying that reciprocal and sectoral tariffs will be announced on April 2, apparently upping the tariff ante yet again. It was not clear from the remarks whether reciprocal tariffs will be added on top of sectoral tariffs or not, Scotiabank's Chief FX Strategist Shaun Osborne notes.
President Trump threatens reciprocal and sectoral tariffs April 2
"Stocks perked up nicely on Friday but these comments suggest there is still immense uncertainty ahead for investors to contend with and that there is little chance of a significant pick up in risk appetite for now. US equity futures are weaker on the session currently. International investors may be looking hard at US returns and allocations amid signs of slowing global growth around US tariff action given that, since the election, the USD, US corporate high yield bonds and stocks have underperformed relative to Treasurys and other, foreign assets."
"Meanwhile, policymakers in Europe and China are channeling policy efforts to provide more stimulus (China outlined plans to boost incomes and consumption earlier todfay). More weakness in the USD looks quite likely moving forward. It’s a busy week for central banks but many policy decisions are expected to result in unchanged rates (the Fed, BoE, BoJ, BCCh). The SNB may ease 25bps while the consensus expects a 100bps increase in Brazil’s Selic rate. "
"On the charts, the DXY appears to be breaking down from the consolidation range that held for most of last week when DXY rebounds were capped around 104.05/10. Index losses below 103.7 are bearish on the short-term chart and point to a push to test key support at 103.2; broader points still suggest a drop to the 100/102 range."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.