Global Markets Shake as Dollar Falls and Euro Surges Amid New Trade Tensions
Global financial markets experienced significant turbulence on Thursday following U.S. President Donald Trump's announcement of higher-than-expected tariffs on key trading partners. The decision drove investors toward safe-haven assets and currencies, leading to a decline in the U.S. dollar and a surge in the euro to a six-month high.
The U.S. Dollar Index, which measures the currency against a basket of six major counterparts, dropped 1.6% to 102.03, its lowest level since early October. Meanwhile, the euro jumped 1.5% to $1.1021, marking its highest level in six months.
Other currencies also saw notable movements; the Japanese yen climbed 1.7% to 146.76 per dollar, reaching a three-week high, while the Swiss franc hit a five-month high at 0.86555 per dollar. The Australian and New Zealand dollars gained 0.56% and 0.9%, respectively, as investors shifted towards higher-yielding assets.
Trump’s decision to impose a baseline tariff of 10% on all U.S. imports, along with additional levies on multiple countries, has sparked economic concerns. Analysts fear that escalating trade tensions could slow global economic growth and drive inflation higher.
While markets had anticipated some trade actions from the Trump administration, the scale and severity of the new tariffs took investors by surprise. This led to a broad sell-off in stock markets and increased demand for safe-haven assets such as gold and bonds.
In China, the yuan weakened to its lowest level against the dollar since February 13 in domestic trading, while offshore rates dropped to a two-month low.
Investors are growing increasingly worried about potential retaliatory measures from affected trading partners, which could further escalate global economic tensions in the months ahead.
