Key points:
- US dollar pulls back against yen
- Exchange rate drops 2.1%
- Greenback battered broadly
Greenback wasn’t green at all on Thursday as the forex market got rocked hard after Trump rolled out the tariffs.
🔔 Japanese Yen Rallies
- The
USDJPY pair shed 2.1% on Thursday in its worst daily session since December. The beating came after Donald Trump finally unveiled his tariff agenda and — drumrolls, please — it was worse than expected. The dollar pulled back against its major rivals as growth fears gripped market participants.
- Trump’s new tariff order includes a hefty 54% tariff on imports from China and 20% tariffs on imports from the European Union. These two are among America’s biggest trading partners and that can only mean one thing.
⚠️ Redefining Global Trade
- The era of globalization is over, at least for now. Both China and Europe are preparing retaliatory measures to hit back against Trump’s unprovoked hostility. On the other side, the White House said that if they were to retaliate, things would get even uglier with even more tariffs coming out of the US.
- Forex markets hate uncertainty. And that’s what drove the US dollar to the ground on Thursday. It lost about 320 pips to the Japanese yen, moving from ¥149.20 to ¥146.03 with a session low of ¥145.18.
📞 Bank of Japan’s Next Move
- The Asian currency was favored among forex speculators for its safe-haven characteristics amid troubling times. Meanwhile, the Japanese economy has internal problems that need dealing with and this short-term jolt might actually end up helping the Bank of Japan move more boldly on interest rate hikes to stamp out inflation ideally without knocking economic growth.
- Elsewhere, the
EURUSD pair blasted off by 1.9% to cross $1.11 for the first time since October. The
GBPUSD climbed 0.8% on Thursday but Friday came with a vengeance and the sterling pared all the gains to dive back under $1.30.
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