Dollar Index Plunges on Increasing Concerns Over U.S. Recession

Dollar Index Plunges on Increasing Concerns Over U.S. Recession

The U.S. Dollar plunged against a basket of currencies last week, falling from a three-week high, after President Donald Trump ordered U.S. companies to start looking for an alternative to China. The move took place in response to Beijing imposing more tariffs on American goods, further escalating tensions between the two economic powerhouses in a prolonged trade dispute. Last week, September U.S. Dollar Index futures settled at 97.530, down 0.477 or -0.49%. For the month, the index is down 0.74%. Contributing to the greenback’s weakness was a dovish speech by Federal Reserve Chairman Jerome Powell. The British Pound posted the largest gain against the U.S. Dollar, settling 1.09% higher. Besides the comments from Trump and Powell, the Sterling was boosted by renewed hopes that there might be a Brexit outcome that isn’t the dreaded no-deal scenario. Safe-haven buying fueled by a steep plunge in U.S. stock indexes helped boost the Japanese Yen 0.85% and the Swiss Franc 0.36%. The Canadian Dollar rose 0.15% against the U.S. Dollar. Gains were limited by a steep drop in crude oil prices. The Euro posted a 0.46% gain against the dollar, but due to its heavy weighting, it had the biggest influence on the index’s decline. Trump Escalates US-China Trade Tensions President Trump triggered a steep break in the U.S. Dollar when he tweeted, “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.” The […]

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