Forex Today: US Dollar capitalizes on safe-haven flows
Here is what you need to know on Friday, July 11:
The US Dollar (USD) outperforms its major rivals as safe-haven flows dominate the action in financial markets early Friday, with the USD Index staying in positive territory above 97.50 in the European session. In the second half of the day, Statistics Canada will publish the employment report for June.
US Dollar PRICE This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.83% | 0.84% | 1.85% | 0.72% | -0.39% | 0.63% | 0.45% | |
| EUR | -0.83% | 0.02% | 0.75% | -0.14% | -1.15% | -0.21% | -0.40% | |
| GBP | -0.84% | -0.02% | 0.74% | -0.14% | -1.16% | -0.22% | -0.54% | |
| JPY | -1.85% | -0.75% | -0.74% | -0.89% | -1.99% | -0.98% | -1.32% | |
| CAD | -0.72% | 0.14% | 0.14% | 0.89% | -1.08% | -0.08% | -0.40% | |
| AUD | 0.39% | 1.15% | 1.16% | 1.99% | 1.08% | 1.06% | 0.63% | |
| NZD | -0.63% | 0.21% | 0.22% | 0.98% | 0.08% | -1.06% | -0.32% | |
| CHF | -0.45% | 0.40% | 0.54% | 1.32% | 0.40% | -0.63% | 0.32% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
US President Donald Trump announced on Thursday that they will impose a 35% tariff rate on goods imported from Canada, beginning August 1. Trump added that the European Union will be receiving a letter notifying them of new tariff rates "today or tomorrow." Finally, he noted that he is planning to impose blanket levies of 15% or 20% on most trade partners. Following Thursday's mixed action in Wall Street, US stock index futures lose about 0.4% in the European session.
After spiking to a two-week-high above 1.3730 early Friday, USD/CAD corrected lower and was last seen trading marginally higher on the day slightly below 1.3700. The Unemployment Rate in Canada is forecast to tick up to 7.1% in June from 7% in May.
EUR/USD stays under modest bearish pressure and trades below 1.1700 in the European morning on Friday. The pair remains on track to snap a two-week winning streak.
The data published by the UK's Office for National Statistics (ONS) showed early Friday that the Gross Domestic Product contracted by 0.1% on a monthly basis in May. This reading followed the 0.3% contraction recorded in April and came in worse than the market expectation for an expansion of 0.1%. GBP/USD stretches lower after this data and trades in negative territory below 1.3550.
After closing in the red on Wednesday and Thursday, USD/JPY regains its traction and rises toward 147.00 in the European session.
Gold posted small gains on Thursday and continued to stretch higher early Friday, supported by the souring risk mood. XAU/USD was last seen rising about 0.5% on the day at $3,340.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
