Wonderful introduction:
A clean and honest man is the happiness of honest people, a prosperous business is the happiness of businessmen, a punishment of evil and traitors is the happiness of chivalrous men, a good character and academic performance is the happiness of students, aiding the poor and helping the poor is the happiness of good people, and spring planting and harvesting in autumn is the happiness of farmers.
Hello everyone, today Avatrade Aihua Foreign Exchange will bring you "[Avatradescn]: Trump's tariff policy has taken a sharp turn! The US dollar index plummeted." Hope it will be helpful to you! The original content is as follows:
As the market is concerned about the impact of tariffs on inflation and the economy, the uncertainty of the US economic outlook has increased, and the US dollar index plummeted to a more than three-month low. At the same time, the euro/dollar surged to a four-month high, which also dragged down the US dollar index.
Analysts pointed out that Germany proposed to establish a 500 billion euro infrastructure fund to boost the outlook for European economic growth and thus stimulate the euro to strengthen.
The dollar index, which tracks the dollar against six major currencies, closed down 126 points on Wednesday, or 1.2%, to 104.32, hitting its lowest level since November 8 last year.
The White House confirmed that Trump will exempt cars imported through the US-Mexico-Canada Agreement by one month, but reiterated that the reciprocal tariffs will still take effect on April 2.
The ADP National Employment Report, known as the "small non-agricultural" report, showed that the growth of private enterprise employment in the United States slowed down in February, adding only 77,000 jobs, far lower than the expected 140,000. The data puts pressure on the dollar.
ADP chief economist Nela Richardson said in a statement: "Policy uncertaintywww.avatradescn.com and slowdown in consumer spending may have led to a slowdown in layoffs or hiring last month. Our data www.avatradescn.combined with other recent indicators show that employers are hesitant to recruit as they assess the future economic environment."
Jefries analyst Brad Bechtel said: "Soft data and turmoil surrounding tariffs have led to weaker U.S. economic outlook."
"Software data and turbulence surrounding tariffs have led to weaker U.S. economic outlook."
"Software data and turbulence surrounding tariffs have led to weaker U.S. economic outlook."
">
MonexUSA head of trading department Juan Perez said: "The market's dependence on the U.S. market is changing. If the market expects trade policies to tend to be protectionist, the financial system will begin to adjust, and cutting the dollar position now seems to be a more cautious approach. If the market believes that tariffs and trade wars are not good for the U.S. economy, investors will once again pay attention to whether monetary policy may be relaxed."
Asian Market
Atsushi Mimura, Japan's deputy finance minister for international affairs, said on Thursday that officials have seen protectionism such as tariffs rise. Mimura further stated that he needed to seek a middle-level approach to address the negative aspects of globalization while avoiding sliding towards protectionism European markets
European market
Producer prices in the euro zone rose sharply by 0.8% and 1.8% month-on-month in January, higher than expected 0.3% and 1.4% respectively.
The monthly growth of the euro zone PPI was driven mainly by a 1.7% increase in energy prices, while capital goods and durable consumer goods also saw significant growth of 0.7% and 0.6% respectively. The prices of intermediate products rose slightly by 0.3% month-on-month, while the prices of non-durable consumer goods rose slightly by 0.2% month-on-month.
The broader EU producer prices also recorded a 0.8% month-on-month increase and 1.8% year-on-year increase. Among individual member countries, Ireland saw the biggest monthly price increase, reaching 6.2%, followed by Bulgaria (+5.4%) and Sweden (+2.3%).
However, not all countries have experienced inflationary pressures, with prices falling in Portugal (-2.2%), Austria (-0.6%), Slovenia (-0.5%) and Cyprus (-0.3%).
The eurozone economy performed poorly in February, with the service industry Purchasing Managers index finally reaching 50.6, down from 51.3 in January, while the www.avatradescn.comprehensive Purchasing Managers index remained unchanged at 50.2.
The situation throughout the region was mixed, with Spain, Ireland and Italy showing signs of expansion, while Germany's service sector slowed and France continued to shrink sharply, reaching its lowest level of 45.1 in 13 months.
Cyrus dela Rubia, chief economist at Hamburg www.avatradescn.commercial Bank, pointed out that the growth of the service industry has hardly offset the long-term downturn in manufacturing. He pointed out that rising investment costs, especially wage pressure, are an increasingly worrying issue for the European Central Bank.
Political uncertainty in major economies has also suppressed market sentiment. The French service industry deteriorates much faster, which may be affected by unresolved political instability. By contrast, Germany's service industry has slowed but is still expanding, and people hope that post-election stability will support the economic recovery.
However, the decisive rebound in the eurozone remains unclear due to external risks posed by trade tensions and weak consumer spending.
The UK service industry has hardly improved in February, with the service purchasing managers index finally reaching 51.0, slightly higher than 50.8 in January, but still well below the long-term average of 54.3. Meanwhile, the PMI www.avatradescn.composite index fell slightly from 50.6 to 50.5, indicating that overall economic activity has stagnated as demand conditions in the domestic and export markets continue to weaken.
Tim Moore, economic director of S&P Global Market Intelligence, warned that "the risk of stagflation is about to increase." New orders fell at their maximum rate in more than two years. Rising wage costs and economic uncertainty have weakened business confidence and brought market sentiment to its lowest level since December 2022.
Worries about slowing growth and continued inflationary pressures have also led to continued unemployment, with the number of employment in the service industry shrinking for the fifth consecutive month, the longest decline outside the epidemic since early 2011.
Inflation in Switzerland accelerated month-on-month in February, with CPI rising 0.6% month-on-month, slightly higher than expected 0.5%. Core CPI (excluding fresh and seasonal products, energy and fuels) rose 0.7% month-on-month. Prices of domestic and imported products rose, up 0.5% and 0.9% month-on-month.
However, the broader inflation trend remains sluggish. www.avatradescn.compared with the same period last year, the overall CPI slowed to 0.3% from 0.4% year-on-year, but it was still slightly higher than the year-on-year expectation of 0.2%. The core CPI stabilized at 0.9% year-on-year. Although the inflation rate of domestic product prices fell from 1.0% year-on-year to 0.9%, import prices continued to shrink, maintaining -1.5% year-on-year.
U.S. market
U.S. private sector employment growth slowed sharply in February, with ADP reporting only adding 77k jobs, well below market expectations of 140k.
The segment shows that the www.avatradescn.commodity production department contributed 42k jobs, while the service department added only 36k. Small businesses have reduced -12k jobs by www.avatradescn.company size, while medium-sized businesses have led the recruitment with a growth of 46k, followed by large businesses with an increase of 37k.
Salary growth has not changed much, with the annual salary growth of those who change jobs slightly slowing from 6.8% to 6.7%, while those who stayed at 4.7%.
ADP chief economist Nela Richardson attributed the hiring slowdown to “policy uncertainty and slowdown in consumer spending” that could prompt layoffs or cautious recruitment.
The US ISM service industry purchasing managers index climbed to 53.5 in February, up from 52.8 in January and above the expected 53.0. The data shows that the service industry continues to expand and key subcomponents are growing.
The business activity index fell slightly from 54.5 to 54.4. New orders rose from 51.3 to 52.2, while employment rose from 52.3 to 53.9. priceGrid pressure remains a worrying issue as the price sub-index jumped from 60.4 to 62.6, heightening concerns about the ongoing inflation.
While the service industry continues to grow, ISM notes that businesses remain anxious about the impact of tariffs, and some respondents believe that federal budget cuts have negatively impacted their prospects.
Despite these uncertainties, ISM noted that February was the third consecutive month of all four major sub-indexes (business activity, new orders, employment and supplier delivery) remained in the expansion zone, the first time since May 2022.
The report also points out that the current level of service activity is equivalent to an annualized GDP growth of 1.6%.
The above content is all about "[Ava Avatrade Foreign Exchange]: Trump's tariff policy has taken a sharp turn! The US dollar index plummeted" and was carefully www.avatradescn.compiled and edited by Avatrade Foreign Exchange editor. I hope it will be helpful to your trading! Thanks for the support!
After doing something, there will always be experience and lessons. In order to facilitate future work, we must analyze, study, summarize and concentrate the experience and lessons of previous work, and raise it to the theoretical level to understand it.