On Wednesday, the U.S. dollar continued its previous decline, influenced by global trade uncertainties and concerns over the slowing U.S. economy. Safe-haven currencies and risk-sensitive currencies generally outperformed the dollar. The U.S. government is consulting with multiple countries, including trade talks with Japan, while tensions between the U.S. and these economies have intensified, unsettling market sentiment.
The recent decline in the dollar is related to investors' concerns about the potential impact of new tariffs on the economy. Last week, the dollar plunged partly due to worries about the negative effects of tariffs on the economy and investors adjusting overseas asset allocations. Federal Reserve Chairman Powell stated on Wednesday that U.S. economic growth seems to be slowing, consumer spending is also decelerating, and the uncertainty brought by tariffs might further drag down U.S. economic performance.
In terms of global trade, U.S. President Trump plans to personally attend the Japan-U.S. trade officials meeting, and the South Korean Deputy Prime Minister will also meet with the U.S. Treasury Secretary to discuss trade issues. At the same time, Trump has ordered an investigation into whether new tariffs should be imposed on critical U.S. mineral imports. These actions have heightened market focus on future trade agreements, but many details are yet to be disclosed, leading to investors' cautious sentiment.
The dollar fell 1% against the Swiss franc, nearing a ten-year low, and the Swiss franc appreciated the most among G10 currencies. In addition, the dollar depreciated 0.71% against the Japanese yen, hitting its lowest exchange rate since September 30. The euro rose 0.84% to 1.1376 dollars, close to the three-year high reached last week.
In commodity currencies, the Canadian dollar rose 0.5% to 1.39 CAD, after the Bank of Canada kept interest rates unchanged and paused rate cuts. The Australian dollar rose 0.35%, reaching its highest level since February 24.
Overall, the dollar's weak performance is closely related to global economic uncertainty, and the market continues to monitor future trade negotiations and policy directions.
