In an environment of economic uncertainty and trade tensions, the US dollar is weakening against major currencies.
Powell's Statements on Interest Rates
On Tuesday, February 11, 2025, Jerome Powell addressed the Senate, reaffirming that the Federal Reserve does not plan to hasten rate cuts. Despite inflation above the 2% target, the Fed does not anticipate further cuts in the short term. Market expectations are now for a limited monetary easing of 35 basis points by the year's end. In light of this cautious posture, the dollar has lost 0.17%, settling at 108.18 on the greenback index.
Trade War: A New Surge
Donald Trump announced a 25% increase in tariffs on steel and aluminum imports, sparking fears of a new trade war with the EU. Athanasios Vamvakidis from Bank of America warned that these measures could lead to a global trade war. The euro rose by 0.22%, while the Japanese yen weakened against the dollar, dropping by 0.3%.
Market Reactions
In this uncertain environment, investors are turning to safe-haven assets like gold. Volatility has also affected the crypto sector: Bitcoin fell by 0.40%, trading at $96,192.60. Ongoing economic tensions threaten to amplify inflationary pressures in the US and further weaken global growth.
The future economic outlook will depend on Powell's upcoming statements and the countermeasures adopted by Washington's trading partners.
