The US dollar has seen a slight uptick in the DXY foreign currency index over the past day. However, many analysts remain skeptical about its return to earlier levels seen this year. Currently, the dollar is up 9.4% year-to-date.
This isn’t particularly surprising, especially given President Trump’s recent comments. He openly suggested that a weaker dollar might be more beneficial. On July 25, he stated, “It doesn’t sound good now, but you make more money with weaker dollars than with strong ones.”
The global community certainly took note of his remarks.
There seems to be, perhaps, a growing lack of faith in US leadership. Recent moves, including steep tariff increases—50% on Brazil, 100% on semiconductors—have sparked concerns. Thierry Wizman, a global FX and Rate Strategist at Macquarie Group, noted in a memo that these actions might push BRICS nations closer together, potentially harming US interests.
Wizman cautioned that, without a diplomatic resolution to tariff issues, Brazil could gravitate further towards China, which could motivate BRICS to collectively step away from the US dollar as a reserve currency.
But this isn’t just a matter of geopolitics. Take Switzerland, for example. Historically neutral, it’s now facing a hefty 39% tariff on exports due to Trump’s policies.
Gold, a significant export for Switzerland, has been affected as well. Recently, gold futures reached record highs as the country reports being subjected to the new tariff regime. In fact, a price of around $3,500 per troy ounce is anticipated.
A Swiss lobbying group expressed alarm, saying, “The worst-case scenario has come to life.” They voiced concerns that maintaining such high tariffs could decimate the Swiss high-tech industry’s exports to the US.
Interestingly, Switzerland has a potential path to reduce its tariff rates to 15%—by joining the EU, which would be a rather ironic twist for Trump. He once claimed that the EU was formed to undermine the US.
Here’s a quick look at the market activity ahead of the New York opening bell:
- S&P 500 Futures: Up 0.34% since yesterday’s flat close.
- Stoxx Europe 600: Increased by 0.15% in early trading.
- UK FTSE100: Down 0.11% in early trading.
- Nikkei 225 in Japan: Increased by 1.85%.
- China CSI 300: Decreased by 0.24%.
- Korean Cospi: Down 0.55%.
- Indian Nifty 50: Decreased by 0.77%.
- Bitcoin: Rose to $116,500.
