The U.S. dollar is struggling, hovering near a three-month low as fresh tariffs from Washington triggered countermeasures from China and Canada. With the global economy facing rising uncertainty, investors are shifting away from the greenback, fearing that escalating trade tensions could slow growth. Meanwhile, China’s annual National People’s Congress (NPC) kicked off, reaffirming its 5% economic growth target for 2025 while increasing fiscal support to counteract the tariff impact.
Euro and Sterling gain ground
As the dollar faltered, the euro climbed to a nearly four-month high, reaching $1.0637, following Germany’s move to establish a €500 billion infrastructure fund. Sterling also held strong near a three-month peak at $1.2794, as investors found confidence in the U.K. economy. These currency gains come amid mounting concerns over the U.S. economy, with markets reacting to uncertainty surrounding trade policies.
Global markets react
Stock markets were mixed, with Hong Kong’s Hang Seng jumping 2.1%, while Australian stocks fell 0.7%. Japan’s Nikkei managed a small 0.4% gain after fluctuating throughout the session. Meanwhile, crude oil prices plunged to six-month lows, and bitcoin stabilized around $87,500 after a volatile week. The uncertainty in the forex and equity markets highlights how investors remain cautious as global trade tensions deepen.
What’s next for the dollar?
With the U.S. imposing higher tariffs and key trading partners retaliating, the dollar faces ongoing pressure. The U.S. Dollar Index is sitting at 105.55, after a sharp two-day drop of 1.9%. As markets digest the latest economic and geopolitical shifts, traders are watching for signs of whether the dollar will rebound—or if more downside is ahead.
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