Worries over global trade dragged the dollar to a six-month low on Monday, leaving investors bracing for more weakness ahead.
The Bloomberg Dollar Spot Index extended declines for a fifth day, falling a total of 3.3 per cent during that stretch. While Treasuries and stocks rallied on news that President Donald Trump will delay levies on some popular consumer electronics, sentiment on the dollar was undermined by his warnings that the exemption will prove temporary.
Protracted sell-offs in the dollar and Treasuries – typically seen as havens in turbulent times – have exacerbated concerns that investors are lightening up on US assets in the face of tectonic trade policy shifts and broader political uncertainty.
Weakness in the dollar and Treasuries is a “horrible, toxic combination”, said Jordan Rochester, head of macro strategy for EMEA at Mizuho International, in an interview on Bloomberg Television.
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China raises tariffs on US goods to 125% as Xi calls on EU to resist ‘unilateral bullying’
China raises tariffs on US goods to 125% as Xi calls on EU to resist ‘unilateral bullying’
The Bloomberg Dollar Spot Index finished Monday 0.3 per cent lower. The gauge has fallen about 6.1 per cent so far this year, on track for its biggest annual loss since 2017.
