The US dollar rises as concerns about US tariffs escalate
The US dollar witnessed a significant rise during the Asian trading period on Thursday, supported by growing concerns about US trade policies and possible tariffs, this rise coincided with the rise in US Treasury bond yields, as investors reassess their economic forecasts under the administration of US President Donald Trump.
Trump's statements exacerbate trade tensions
President Trump cast a shadow over world markets after he hinted at the possibility of imposing new tariffs on the main trading partners of the United States, including Canada and Mexico.
Trump explained that these fees may come into force by the second of April, representing another extension for a month, however, a White House official raised more uncertainty after confirming that the previous deadline set for the second of March, is still in effect until this moment.
These conflicting statements increased the uncertainty about US trade policy, which affected the movements of the markets.
US Treasury bond yields rise
In light of these developments, the two-year US Treasury bond yields rose to 4.09%, after they had fallen to their lowest level since the first of November at 4.065% in the previous session. The yield on ten-year US bonds also rose to 4.2809%, compared to its lowest level of 4.245% on Wednesday, the lowest level in two and a half months.
The impact of weak economic indicators
The US dollar and bond yields have come under significant pressure in recent weeks, as a series of weak economic indicators coincided with growth concerns caused by Trump's plans to impose tariffs.
Recent economic data has also shown signs of slowing growth, leading markets to expect the Fed to cut interest rates twice this year, by a quarter point each time, with the first cut expected in July and the second in October.
Waiting for new economic data
Markets are looking ahead to the release of GDP and durable orders data on Thursday, looking for any stronger signs of slowing economic growth.
In addition, the personal consumer spending index, the Fed's preferred measure for assessing inflation, is scheduled to be released on Friday.
