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

RBA to Continue Interest Rate Cuts Amid High Unemployment 08 Jul 2025: Paige Estritori The Reserve Bank of Australia (RBA) is anticipated to maintain its trajectory of incremental interest rate reductions, according to insights from leading financial analysts at ANZ. Recent data from the ANZ-Indeed Australian Job Ads series revealed a rise from 114.8 in May to 116.9 in June, suggesting a potential rebound in job advertisements after previous declines. Despite a stable unemployment rate and hours-based underutilisation rate since mid-2024, the Australian labour market remains strained. - read more

RBA Poised for Cash Rate Cut Amid Inflationary Trends 07 Jul 2025: Paige Estritori As the Reserve Bank of Australia (RBA) prepares for its forthcoming monetary policy announcement, economic analysts anticipate a further reduction in the official cash rate by 25 basis points. This prediction, supported by Finder’s RBA Cash Rate Survey, reveals that 88% of participating experts foresee a cut that would lower the interest rate to 3.6%, aligning the decision with the recent decline in both headline and core inflation to the central bank's target range of two to three percent. - read more

Uncovering the Impact of Unsolicited Solar Sales on Consumers 04 Jul 2025: Paige Estritori In a concerning revelation, Australian retiree Christine Hirchfield shares her ordeal with an unsolicited solar installation that turned into a financial nightmare. Despite her initial enthusiasm for cheaper energy bills and a greener home, the project remains incomplete more than a year later. Consumer groups are now advocating for a nationwide prohibition on deceptive sales practices that target vulnerable consumers like Ms Hirchfield. - read more

Australian Online Retail Sees Continued Growth in May Amidst Nationwide Spending Surge 03 Jul 2025: Paige Estritori Australian online retail sales experienced a modest rise in May, as consumers continued to invest in fashion, games, and toys. According to the latest figures from the National Australia Bank, there was a 0.7% increase in online sales for the month, compared to a 1.1% growth in April. Over the past year, Australians have spent approximately $63 billion on online retail purchases. - read more