US Dollar Faces Historic Decline Amid Trump’s Tariff Policies

0

This slump in the dollar’s strength could align with a broader strategy by the Trump administration to devalue the currency. Such a plan, associated with Stephen Miran, Chairman of the US Council of Economic Advisers, remains speculative as Miran has previously denied any conspiracy. However, the notion underscores the administration's goal to make US exports more competitive and potentially reduce the trade deficit.

While these developments could theoretically benefit American exporters, the looming uncertainty due to ongoing negotiations with key international partners complicates the landscape, with an important deadline approaching on July 9. Investors are apprehensive, as Trump's rigorous tariffs could elevate inflation and interest rates, impacting global financial ties to the US dollar.

Despite White House assurances of confidence in the US economy, highlighted by rallies in ten-year Treasury yields and significant investment influxes, analysts warn of underlying risks. Stephen Miller, a consultant for GSFM, has voiced concerns about the potential volatility brought on by these policies.

Rick Rieder of BlackRock suggests that full-scale de-dollarisation is not imminent, yet the erosion of confidence in the dollar—typically a safe haven asset—could be aggravated by escalating US government debt. The national debt is set to rise by an additional $3 trillion due to Trump's budget bill, which narrowly passed the Senate and awaits House approval.

As inflationary pressures and fiscal deficits mount, the yield on ten-year Treasuries has experienced a downturn from nearly 5% earlier this year to 4.267%, suggesting continued stress on financial markets. Ben Emons of FedWatch Advisors predicts ongoing pressure on the lower end of the yield curve, which could further weaken the dollar if Treasury yields face increasing pressure.

Published:Thursday, 3rd Jul 2025
Source: Paige Estritori

Share this news item:

Finance News

Clear

Increasing Number of Qualified Financial Advisers Opt Out of Practice 11 Jul 2025: Paige Estritori Recent analysis from WealthData indicates a growing trend among financial advisers in Australia, where a significant portion of those who have successfully passed the financial adviser exam are opting not to practice. As of now, 5,096 individuals, representing 33.31% of active advisers, have chosen not to proceed into practice after passing the exam—up from 28.36% a year prior. - read more

Melbourne's Housing Market: A Prime Opportunity For Buyers 11 Jul 2025: Paige Estritori The Reserve Bank of Australia (RBA) recently surprised many by maintaining the interest rate at 3.85%, against expectations of a cut. This decision is seen as a measure to continue moderating inflation, but it simultaneously delays potential spikes in the housing market, providing a favorable window for prospective homebuyers. In particular, Melbourne's current market presents significant value, offering a promising opportunity for those looking to enter the property market. - read more