Dollar falls: investors flee risk, Fed may cut rates ahead of schedule
The US currency is weakening against the euro and yen amid Trump’s tariffs and growing recession fears, as traders shift assets to safer instruments.
On Friday, the US dollar continued to lose ground in the currency market. As of 9:15 a.m. Kyiv time, the euro rose to $1.1073, and the yen strengthened to 145.82 per dollar, reports Interfax-Ukraine.
Despite a slight gain against the British pound to $1.3091, the ICE Dollar Index (DXY), which tracks the dollar's value against six major currencies, fell by 0.49%.
The broader WSJ Dollar Index remained unchanged.
The decline is driven by investor concerns over the consequences of new import tariffs announced by former US President Donald Trump.
These measures triggered a wave of risk aversion in global markets. Typically, the dollar strengthens under such conditions, but this time, investors opted for safer assets like US Treasuries, leaving the dollar under pressure.
Deutsche Bank analyst George Saravelos warned of a potential confidence crisis in the US economy. He noted that countries with large dollar holdings might begin reducing their investments, putting further pressure on the dollar.
Spartan Capital chief economist Peter Cardillo described the dollar’s weakness amid rising market fear as an alarming signal. Meanwhile, traders await the release of US March unemployment data, which may clarify the depth of the economic slowdown. According to Trading Economics, the Fed is expected to cut rates four times this year, starting in June.
Earlier it was reported that Emmanuel Macron will hold an emergency meeting with representatives of affected industries — aviation, automotive, chemicals, agriculture, and pharmaceuticals — following the US tariff announcement.
French authorities are discussing business support measures and a potential EU response. Prime Minister Gabriel Attal and several ministers are expected to attend.