Reference News Network reported on April 12 that Agence France-Presse published an article titled "Dollar Plunges in the Shadow of Trade War" on April 10. The article is excerpted as follows:
Due to Trump's trade and economic policies, the dollar has been depreciating gradually and fallen to levels not seen for several years. Trump's constant "attitude reversal" is damaging America's credibility among foreign exchange market participants.
Last November, when Trump was elected, the dollar was once boosted and very close to parity with the euro. Adam Barton of the foreign exchange live website summarized at that time that the dollar was "highly sought after," but now it has plummeted significantly.
Since the Republican president took office on January 20, the dollar's exchange rate against the euro has fallen by more than 7%. On the 10th alone, the dollar fell more than 2% against the euro and over 1% against the pound.
These seemingly small changes are actually very unusual in the foreign exchange market. Mark Chandler of Bannockburn Global Forex said: "This is an important development today."
The trade war launched by Trump after returning to the White House, along with the president's multiple policy reversals, have weighed down the U.S. currency.
Barton pointed out: "We haven't experienced many trade wars, especially in the past 90 years. Therefore, modern markets have never suffered such impacts. When market participants realize this, they just want to get rid of this impact."
Due to Washington's initiation of a trade war, global economies have already predicted a reduction in their gross domestic product. Analysts from JPMorgan warned that Trump's policies would "push the United States into recession this year."
Patrick O'Haire of Briefing.com believes that the weakening of the dollar "is partly a momentum, confirming the decline of 'American exceptionalism'."
Analysts from Brown Brothers Harriman stated in a report that "a sudden shift in trade policy will further weaken the credibility of U.S. policies."
Therefore, investors are beginning to abandon the U.S. currency, which has been highly sought after due to its stability, and turn to other assets instead.
Gold, the king of safe-haven assets, hit a record high on the 10th, exceeding $3176 per ounce.
Another sign of investor loss of confidence in the U.S. economy is that the exchange rate of the dollar against the Swiss franc hit a new low in more than ten years. The Swiss franc is also considered a safe-haven asset.
Original text: https://www.toutiao.com/article/7492325786456769024/
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