Dollar dented as Trump tariff threats drive – Money News
By Amanda Cooper
LONDON, Jan 19 (Reuters) – The greenback fell on Monday, as traders piled into secure havens just like the Swiss franc, after U.S. President Donald Trump’s newest tariff threats towards Europe over Greenland sparked a broad risk-averse transfer throughout markets.
Trump stated over the weekend he would impose an further 10% import tariff from February 1 on items from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Britain, till the U.S. is allowed to buy Greenland.
European leaders had been scrambling to avert a commerce struggle and on Sunday agreed to accentuate their efforts to dissuade Trump from imposing tariffs, whereas additionally getting ready retaliatory measures ought to the duties go forward.
After dropping briefly in in a single day trading, European currencies together with the euro, pound and Scandinavian crowns rose. The Swiss franc, a basic safe-haven, headed for its largest every day rise towards the greenback in a month.
EURO BENEFITS FROM DOLLAR AVERSION
The euro was up 0.3% at $1.163 round noon in Europe, whereas the pound was up 0.27% to $1.3415.
“Typically you would think tariffs being threatened would lead to a weaker euro,” stated Khoon Goh, head of Asia analysis at ANZ. “But, as we’ve seen last year as well, when the ‘Liberation Day’ tariffs were getting put in place, the impact in FX markets actually has been more towards dollar weakness every time there is heightened policy uncertainty emanating from the United States.”
Investors dumped the greenback after Trump unveiled sweeping tariffs on the world final April, triggering a disaster of confidence in U.S. property.
While some motion of capital out of the greenback was evident on Monday, most notably with the Swiss franc’s positive factors, analysts stated a additional escalation in tensions might see traders flock back to the U.S. currency.
“The market has been understandably anxious about the dollar’s decline in value since last April. But I would really caution against assuming that the dollar’s safe-haven status is gone,” Rabobank chief currency strategist Jane Foley stated.
“Even if non-U.S. investors decided to take their money out, where would they go? Other markets aren’t big enough to maintain that. The sheer size of the (U.S.) market means that there is always going to be some safe-haven value associated with U.S. assets,” she stated.
YEN STILL IN INTERVENTION ZONE
The greenback was down 0.5% on the day at 0.7984 Swiss francs, and a fraction decrease towards the Japanese yen, one other non-U.S. safe-haven, at 158 yen.
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