Because of Trump’s customs duties, the dollar is retreating against the euro and sterling

The dollar fell on Wednesday by 1% against the euro, as soon as US President Donald Trump announced the imposition of new customs duties on his country’s commercial partners.

The dollar fell by 1.09% to 1,0924 against the euro at 20.17 GMT, and fell 0.75% to 1,3025 against the Australian pound.

And approximately 20,40 o’clock in the dollar, some of its losses, to record a exchange rate of 1,0845 against the euro, and 1,3003 against the pound, to return to the levels of the convergence of those that he was registering before Trump’s speech.

The dollar exchange rate was affected on Wednesday evening due to the new customs duties that Trump announced his intention to impose in order to put an end to “looting” the United States.

A negative factor for the US dollar

US President Donald Trump announced the imposition of mutual customs duties on countries in the whole world, in implementation of what he has been constantly vowed since his election campaign with the aim of starting a “golden age” for the United States, but it may cause the collapse of the global economy.

“The increase in customs duties has been a negative factor of the US dollar” in recent weeks, “Matthew Wheeler, an analyst at Forex.com, told AFP.

Forex traders fear that customs duties will lead to “slowing the American economy,” according to the analyst.

Reduce interest rates

In order to support the American economy, the Federal Reserve (the US Central Bank) may seek to reduce interest rates, making the dollar less profitable for investors, which may lead them to give up this currency.

Stephen Ennis, of the “SBI Aseet Management” group, stressed that “customs duties are offended by inflationary and negative repercussions on growth,” describing it as a “toxic mixture of the macroeconomic”.