Customs duties and financial policies .. Does the dollar face the risk of decline?

An economic report said: The statements of former US President Donald Trump regarding the imposition of new customs duties dominating the economic scene, as it threatened to impose 25% fees on all imports of steel and aluminum.
The report added that although steel imports only represent less than 15% of the total American consumption, the aluminum is a different story, as the United States imports more than half of its needs of it, which indicates that the American administration sees the promotion of local production of this mineral. A strategic necessity for economic security.

Later exceptions

While the details remain unclear, it should be noted that 25% fees on steel and 10% on aluminum were already imposed during the first term of Trump, with subsequent exceptions to a number of countries, including the European Union, Canada and Mexico.

The report indicated that now, the question arises about whether Canada will be affected by this step, as the United States relies on it to import about 40% of its aluminum needs. So far, the markets have dealt with these developments quietly, despite the US dollar recorded an instant increase when the trading opened.

Dollar and currencies

According to the report, the scenario of the US dollar decline may achieve if the Trump administration and US Treasury Secretary Scott Besent implemented serious plans to reduce financial spending, which may contribute to reducing the deficit, but it may also lead to an economic recession later this year.

He stated that financial expansion was one of the main factors that strengthened the American economic performance, and therefore its reduction may lead to slowing growth, at least until the benefits of relieving regulatory restrictions or any possible tax reform in achieving positive results, perhaps by 2026 or after it.
According to the report, it seems that the Trump administration is aware of the importance of controlling public finances, but implementing this represents a tremendous challenge, as a large part of spending goes to the service of religion and mandatory expenses, such as social security, which are politically thorny files.
As for the Midikir and Medicid programs, the administration may resort to pressure on pharmaceutical companies and health care providers to reduce prices.
In terms of revenue, the total federal tax revenues of 2024 amounted to about $ 4.9 trillion, supported by strong returns from capital profit taxes thanks to the significant increase in stock markets, while public spending reached $ 6.8 trillion.

The timing is the key to deciding

The report said: So far, there are only limited references to an actual shift in the direction of the US dollar, as the dollar/yen is the only husband who recorded a clear reflection, but its continued decline depends on its survival below the level of 156.00 and on the success of the Treasury Secretary to keep the returns on Bonds for 10 years are under control.
As for the euro/dollar pair, it still needs more emphasis on the reflection of the dollar. On the other hand, the Australian dollar is close to achieving noticeable gains, supported by the high prices of basic commodities, foremost of which is copper.

Customs

According to the report, Trump’s statements on customs duties are likely to raise concerns about the outbreak of a commercial war, which may lead to sharp fluctuations in the markets, as any new news address can reshape the scene.
The report stated that the Trump team aims to enhance economic security and self -sufficiency in the strategic sectors as a national priority, with pressure on neighboring countries, such as Mexico and Canada, to cooperate in a new war against drugs.
The administration seeks to reduce the Chinese influence in Latin America, both with regard to the chemical supplies used in the production of illegal drugs or the broader economic and political impact of China in the region.
At the same time, it appears that the American strategy is moving towards reducing European dependence on the American security umbrella, which may mean the imposition of selective customs duties used as a negotiating pressure tool, rather than launching a comprehensive trade war.

Financial policies

In general, global financial trends indicate more expansion, especially in Europe, which face increasing security and economic challenges.
These trends are expected to be strengthened if the European Union contributes to the reconstruction of Ukraine if a ceasefire or a truce agreement is reached.
He pointed out that one of the factors that might weaken the US dollar this year is the possibility of the momentum of the shares of major technology companies, especially if the artificial intelligence sector loses some of its momentum after the recent decline of Invidia.

Euro/dollar pair analysis

The euro/dollar pair tried to make a bullish reflection after Trump announced 25% customs duties on Mexico and Canada, which was postponed for another month. Despite the rapid recovery of 1.0200 levels, the continued fluctuation keeps the state of uncertainty about whether this is a real reflection or just fluctuations driven by news.
For conflicts to climb, the closure above the level of 1.0400 will be a first step towards stabilizing the direction, but the decisive area between 1.0500 and 1.0600 will determine whether the trend will turn towards climb.
According to the report issued by “Saksu Bank” on the declining side, the closure below 1.0300 will keep the possibility of testing the lowest levels of the current session.
The American job report for January showed the increase in returns on bonds, as the unemployment rate fell to 3.9% compared to expectations at 4.1%.
Federal Reserve, Jerome Powell, will testify to the Senate on Tuesday, then to the House of Representatives on Wednesday.
US inflation data will be announced on Wednesday, followed by a 10 -year -old wardrobe auction, then the bond auction for 30 years on Thursday, and finally retail sales data on Friday.
Scandinavian currencies recorded a strong performance, and the Swedish and Norwegian Crois have achieved remarkable gains against the euro.
Gold returned to very rare strength levels at 7.5, indicating a strong rise in the momentum of demand for it.