Latest news with #ICEU.S.DollarIndex
Arabian Post
5 days ago
- Business
- Arabian Post
Dollar Suffers Worst H1 Slump in Four Decades as Capital Seeks Alternatives
The U.S. dollar has slumped by more than 10 per cent year‑to‑date, marking its most severe first‑half decline since the mid‑1980s, as global investors pull back from dollar‑denominated assets amid doubts over U.S. economic policy and rising interest in alternatives such as cryptocurrencies. Institutional investors across Europe and Asia are leading a broad sell‑off. European pension funds and insurers have slashed dollar‑asset exposure to levels unseen since 2022, primarily through equity divestment, while Asian bondholders have been unwinding fixed‑income positions. Market watchers identify multiple bearish drivers: weakening Federal Reserve credibility under the spectre of political interference, dovish statements signalling potential rate cuts, and concerns over President Trump's tariff posture and mounting debt. These factors have undercut confidence in the dollar's role as the premier global reserve asset. ADVERTISEMENT Declining yields on U.S. Treasuries have narrowed their appeal, prompting asset shifts toward Europe and emerging markets and feeding a broader investor rotation away from dollar‑centric investments. Cash strategists at Bank of America report that the net underweight position on the dollar is the most significant in two decades, signalling widespread repositioning. Despite periodic reprieves, market technicals remain weak. The ICE U.S. Dollar Index, trading around the high‑90s, broke key support levels, triggering technical patterns that suggest further downside unless a strong reversal emerges. The dollar's weakness is also fueling a surge in alternative assets. Cryptocurrencies like Bitcoin have rallied, with analysts highlighting an inverse correlation to the dollar's performance. Gold and select equities in Europe and Asia have benefited from the reallocation of capital. Echoes of the mid‑1980s Plaza Accord era are notable, when coordinated efforts led to a sharp devaluation of the dollar. However, experts caution that the current environment reflects deeper structural trends: geopolitical uncertainties, shifting reserve currency strategies, and Asia's growing role in capital flows. Some analysts argue that short‑term technical bounce possibilities exist, especially if U.S. economic indicators outperform or geopolitical tensions rekindle risk‑off flows. Yet, the prevailing consensus points to a prolonged adjustment period, as 'short dollar' bets remain deeply entrenched among fund managers. The dollar's slide has implications beyond currency markets. Weaker dollar conditions typically ease financial constraints for emerging economies with dollar-denominated debt, support commodity prices, and influence global trade balances. Conversely, U.S. consumers may experience elevated import costs. Attention now shifts to key catalysts: upcoming Fed commentary, U.S. inflation and employment data, and whether the administration proceeds with proposed tariffs or investment taxes that could further unsettle international investor sentiment.
CNBC
12-06-2025
- Business
- CNBC
Gold's furious rally has cooled off, but these strategists say it's just a breather
The rally in gold has taken a back seat to other areas of the market in the past several weeks, but at least two strategists remain firmly bullish on what comes next. The spot price of gold has surged 29% this year, but the yellow metal has not made a new high in more than a month. That pause has come even as other precious metals, such as silver and palladium , have jumped. XAU= YTD mountain Gold has been one of the top performing assets in 2025. Paul Wong, a market strategist at Sprott Asset Management, told CNBC that this is likely a short-term break in the latest gold rally, caused by reduced fears around tariffs. "I think we're probably consolidating before the summer rally," Wong said. Joni Teves, UBS precious metals strategist, echoed that sentiment in a Wednesday note. "In spite of the pause in gold's uptrend for now, market sentiment appears reasonably unconcerned about the prospect of further consolidation in the near term. High levels of uncertainty around U.S. tariffs, fiscal policy and the Fed's consequent response reinforce the appeal to diversify portfolios, wherein gold stands out as an attractive option," Teves said. Gold is in a multi-year uptrend, boosted by several factors. For one thing, foreign governments and central banks have been buying gold in large quantities in part to diversify away from the U.S. dollar as the reserve currency of choice. Gold is also seen as a defensive asset, which makes it attractive when fears around global growth and the U.S. budget deficit flare up. Notably, the rally for gold this year has come alongside a sharp decline in the strength of the U.S. dollar . On Thursday, the ICE U.S. Dollar Index hit its lowest level in more than 3 years. "The main thing to look at really is the U.S. dollar, which continues to be very weak," Wong said. — CNBC's Michael Bloom contributed reporting.
Time Magazine
24-04-2025
- Business
- Time Magazine
Trump's Trade War Sparks Conversation About Future of U.S. Dollar
Whether the U.S. dollar will remain the world's reserve currency in the wake of President Donald Trump's trade war was a source of debate on Wednesday at the 2025 TIME100 Summit. Writer and CNN host Fareed Zakaria, the moderator of a panel on the future of money, asked whether the U.S. dollar's status is threatened, especially since 'currencies are based on trust.' He and others pointed to the chaotic weeks since Trump's April 2 announcement of steep taxes on imports on much of the world, some of which he later paused. Within a day, the U.S. dollar fell to a six-month low against the Euro. On Monday, the ICE U.S. Dollar Index, which measures the dollar against a basket of foreign currencies, showed the dollar dipping to its lowest level since March 2022, according to CNBC. Raymond Dalio, hedge fund manager and founder of Bridgewater Associates, described the tariff war as a 'symptom of an underlying monetary problem' and of mass changes happening in the international and domestic order. 'The dynamic has been that we don't produce things well, and China's a big manufacturer,' Dalio said. 'We're at a point that that's not sustainable.' Jeremy Allaire, co-founder, CEO and chairman of Circle, a sponsor of the summit, chimed in and said that issues with the U.S. dollar, especially following the 2008-2009 financial crisis, left a space for businesspeople like him to see how they could utilize digital currency in the face of the volatility of traditional monetary systems. Circle is a stablecoin company, and stablecoins are different from more volatile cryptocurrency in that money goes in a reserve account and are designed to hold the value of a U.S. dollar. In that way, he said, stablecoins are a new form of money that could help 'drive' the influence of the U.S. dollar in the global economic system. 'Right now, the United States needs to improve competitiveness and demand for dollars. It needs to improve technology competitiveness,' he said. 'I think the question is 'What is money?' added Dalio. 'What is going to be a store-hold of wealth that is going to be exchangeable internationally, recognized internationally?' U.S. Senator Kirsten E. Gillibrand, who represents New York, said, though, that lawmakers on both sides of the aisle need to work together to add a road map for how to engage in cryptocurrency, to deter money laundering, and to ensure consumer protections. 'What Congress must do is get their head out of the sand and do the work to regulate this industry so that we can continue to be the center of the world financial markets, the use of cryptocurrency, the use of blockchain, the use of stable coins,' Gillibrand said. Allaire suggested the interest in alternative currencies isn't going to go away amid continued global upheaval. 'What's interesting is that for people around the world, there's an enormous amount of demand for people who want to hold digital dollars,' he said, 'They're seen as a stronger alternative to oftentimes even worse fiscal monetary issues in their own countries and regimes.' --- The TIME100 Summit convenes leaders from the global TIME100 community to spotlight solutions and encourage action toward a better world. This year's summit features a variety of speakers across a diverse range of sectors, including business, health and science, AI, culture, and more. Speakers for the 2025 TIME100 Summit include human rights advocate Yulia Navalnaya; Meghan, Duchess of Sussex; comedian Nikki Glaser; climate justice activist Catherine Colman Flowers; Netflix CEO Ted Sarandos, and many more, plus a performance by Nicole Scherzinger.
Business Insider
22-04-2025
- Business
- Business Insider
Dollar Decline Raises Concerns on Its Future Reserve Status
On Monday, the U.S. dollar plunged to its lowest level in three years, as escalating friction between President Donald Trump and Federal Reserve Chairman Jerome Powell rattled global investors and weakened confidence in the American economy. Stay Ahead of the Market: Discover outperforming stocks and invest smarter with Top Smart Score Stocks. Filter, analyze, and streamline your search for investment opportunities using Tipranks' Stock Screener. Against a basket of major currencies, the ICE U.S. Dollar Index slumped to 97.923, a level not seen since March 2022. The euro climbed above $1.15, while the dollar hit a decade-low against the Swiss franc and a seven-month low against the Japanese yen. Testing the Dollar's Reserve Status The recent decline in the U.S. dollar has sparked concerns among market participants. There is a growing apprehension that the drop reflects a deeper investment unease as President Trump attempts to modify global trade dynamics. The dollar's long-standing dominance in international trade benefits from low U.S. borrowing costs and amplifies American geopolitical influence. Economists warn that this trust, built over decades, could be swiftly undermined. Financial institutions like Deutsche Bank and Capital Economics have highlighted the growing 'confidence crisis' and questioned the dollar's future reserve status. The implications are not just for financial markets but could reflect broader geopolitical shifts if trust in the dollar's reliability as a safe-haven currency continues to weaken. What's Driving the Decline? President Trump intensified his criticism of Powell on Monday through social media, labeling the Fed chair a 'major loser' and demanding immediate interest rate cuts. This followed earlier comments where Trump stated Powell's termination 'cannot come fast enough.' The situation grew more concerning for markets after White House economic adviser Kevin Hassett confirmed that the administration was exploring whether they could remove Powell from his position—an unprecedented move that would challenge the central bank's independence. Economists warn that undermining the Federal Reserve's independence could have serious consequences, particularly if the central bank's mandate becomes politicized, as policymakers might struggle to control inflation effectively. The dollar's weakness extends beyond the Fed controversy. Trump's sweeping tariffs and unpredictable trade policies have darkened the outlook for the U.S. economy, leading investors to pull money out of American assets. Implementing global reciprocal tariffs appears to have triggered the latest bout of dollar selling. Impact on Markets Markets reflected this uncertainty, with all three major indexes dropping more than 2% on Monday. The tech-heavy Nasdaq was hit particularly hard, dragged down by steep losses in the 'Magnificent Seven' megacap growth stocks. Trading was relatively thin on Monday, with many global markets closed for Easter Monday holidays. Other currencies benefiting from the dollar's slide include the British pound, which rose to its highest level since September at $1.34, and the Australian dollar, which reached a four-month high. The New Zealand dollar also reclaimed the $0.60 level for the first time in over five months.
The Independent
21-04-2025
- Business
- The Independent
US dollar hits three-year low as stocks tumble after Trump rips fed chair Jerome Powell
The value of the U.S. dollar sank to its lowest point in three years Monday after Donald Trump went on the offensive again, hitting out at the chair of the Federal Reserve. In a post on Truth Social, the president claimed that the U.S. economy would slow unless Jerome Powell, who he referred to as 'a major loser,' lowered interest rates immediately. He has previously called for lower rates and suggested that Powell should be fired. The ICE U.S. Dollar Index, which measures the dollar against multiple other foreign currencies, fell to 97.92 by market close on Monday – the lowest level for the index since March 2022, according to FactSet. The dollar has fallen significantly since Trump's inauguration in January and appears to have been spurred on by his threats of sweeping tariffs, announced on his so-called 'Liberation Day.' Global markets responded again to Trump's latest beef with the Federal Reserve, with the Dow Jones Industrial Average slumping by 1,221 points lower (3.1 percent). The S&P 500 dropped 3.3 percent, and the Nasdaq Composite lost 3.6 percent. Tech firms pushed the major indexes down further. Stocks in Tesla and Nvidia lost 7 percent and 6 percent, respectively. Amazon and Meta Platforms both lost 4 percent. ''Preemptive Cuts' in Interest Rates are being called for by many,' Trump ranted on Truth Social. 'With Energy Costs way down, food prices (including Biden's egg disaster!) substantially lower, and most other 'things' trending down, there is virtually No Inflation. 'With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW. 'Europe has already 'lowered' seven times. Powell has always been 'To Late,' except when it came to the Election period when he lowered in order to help Sleepy Joe Biden, later Kamala, get elected. How did that work out?' The president's latest tirade comes as investors still speculate on the fallout from his tariff plans. Since April 2, when Trump announced the levies, the Dow Jones has fallen 9 percent, the S&P 500 is down by around 8 percent and the Nasdaq has lost nearly 10 percent. Bloomberg reported Monday that Trump planned to meet with executives from Walmart, Target, Home Depot and Lowe's, as concerns about his tariffs continue to rattle major U.S. retailers. The president's baseline tariffs of 10 percent and import taxes of 145 percent on Chinese goods have created broader concerns about higher inflation and an economic slowdown, as well as uncertainty and increased fears of a recession.
