The US dollar index helps to measure the strength of the greenback. It is now being measured against a basket of six major currencies but now it has touched a low of 94.82. It has slipped by a good 0.2% and this is shocking to say the least. The index touched the highest level a year ago and this has bolstered the US interest rates as well. There are huge fears about a US trade conflict and now nobody really knows where they stand. The rally in the dollar has faded and now investors are super concerned about the global trade tensions. By the looks of things, they have dampened what would have been the safe haven for the greenback but only time will tell if this really is the case.
Trade tensions have remained in focus after the Trump administration came out to say that on Tuesday they are going to impose further 25% tariffs on China’s goods. This is going to be done over $16 million dollars worth and the move comes right from Washington. The idea is that they want to pressure China so that they will negotiate the trading concessions. The move comes after China stated that they were going to impose tariffs on $34 billion dollars’ worth of goods. China is now due to retaliate but it is the trade tension that remains in focus. In fact, the Trump administration has come out to say that they are going to impose more tariffs and at the moment the dollar is weak against the yen. There have been talks between them and these happened on Thursday. The yen has also gained a serious amount of momentum against the Euro but this is still somewhat losing out when you look at the bigger picture. The Euro is a touch low against the dollar and the single currency rose to the highest levels in quite some time against the pound.
The sterling however is under quite some pressure and there are worries about the growing idea of having a no-deal Brexit. This would be devastating to the UK but that being said, the pound is also the weakest that it has been since August 2017. This is especially the case when you look at the USD. Of course, it is also important to know that the yuan has happened to slide against the dollar and this is interesting to think about because the currency is usually very closely controlled. The main reason why all of this is possible is all down to offshore trading, but with that being said, there doesn’t look to be much that they can do to try and protect themselves against what lies ahead.