The U.S. Dollar has dropped in value by almost 1.0% for the week, with potential for further losses as tariffs come back to haunt markets.
Overview
After yesterday’s Purchasing Managers Index showed the economy remains solid, doubt is once again affecting risk with the possible imposition of tariffs on Europe.
U.S. President Donald Trump made comments on social media suggesting that a 50.0% tariff on European imports would start next month, while Apple Inc. could face a 25.0% tariff if it does not look to manufacture the iPhone domestically. The news is negative for all market classes, but Gold, whose prices are having the best weekly performance in over a month.
Per the Bloomberg Dollar Spot Index, the Buck is now trading around its weakest levels overall since December 2023. As far as equities are concerned, the S&P 500 Index is down by more than 1.2% for the week, the worst the exchange has experienced since the start of April. While we cope with changes in mood and possibly trade policy, expect volatility and wild moves. MonexUSA will be closed on Monday in observance of the Memorial Day holiday.
What to Watch This Week…
- Monex USA Online is always open
The complete Economic Calendar can be found here.
EUR ⇑
The Euro is rising and trending around its best levels over the Buck from the start of the month. We shall see what responses Europe has to the possible headache in the form of tariffs. While the Euro-zone showed a bit of a slowdown in its PMIs, specific GDP numbers for Germany revealed a better situation than estimated with double the growth reading at 0.4% vs 0.2%for Q1. There will be a contrast of fear and optimism clashing as we head towards a long weekend in America.
MXN ⇑
The Mexican Peso does not have a clear direction after jumping up and down all week and closing basically flat. Mexico’s week was also tumultuous, with violence in the headlines being a source for weakening the currency. Nevertheless, economic figures such as Sales and yesterday’s revelation of 0.1% Gross Domestic Product expansion throughout Q1 have uplifted faith in the Peso. Inflation has also risen, and it is surprising that it is in positive territory when contraction was expected.
