Amid new signs that Donald Trump's trade policies are negatively impacting the U.S. economy, the dollar has hit its lowest point in six weeks.
Dollar Weakness
On Tuesday, the dollar index hardly changed after dropping to 98.58, its weakest level since late April. Compared to the Japanese yen, the dollar stood at 142.71, nearly a one-week low. The euro hovered around $1.1446 after briefly climbing to $1.1454, its strongest in six weeks.
Tariff Impacts
On Wednesday, U.S. tariffs on imported steel and aluminum will double to 50%. This day also marks the deadline for other nations to submit their best proposals in ongoing trade discussions with Washington. Rodrigo Catril, a senior foreign-exchange strategist at National Australia Bank, remarked, "What this whole dynamic is basically saying is trade tensions are not really improving in that regard, and we’ve seen the dollar getting hammered widely."
Concerns Over National Debt
On Monday, the dollar index fell 0.8 percent after data showed U.S. manufacturing shrank for the third straight month in May. In addition, concerns about the U.S. government's finances have pressured investor sentiment, leading to a broader "sell America" trend that has pushed down stocks and Treasury bonds in recent months. This week, the Senate will review the administration’s tax-cut and spending plan, which could add $3.8 trillion to the federal debt.
Negative economic data and high tariffs are putting pressure on the dollar, leading to its decline in value on the international market. Concerns over national debt also contribute to market instability.
