The decline in the dollar slowed slightly on Monday, as US President-elect Donald Trump denied information from the Washington Post according to which the customs duties he plans to put in place will be more limited than announced. Around 7:45 p.m. GMT, the dollar fell by only 0.77% against the euro, to 1.0388 dollars, and lost 0.73% against the pound, to 1.2513 dollars, after having fallen by more than 1% against these two currencies. “The session was animated by the headlines”summarized Shaun Osborne, of Scotiabank, to AFP.
The greenback initially fell following information from the Washington Post, based on “three sources close to the case” according to which the customs duty increases desired by Donald Trump will only concern certain sensitive sectors. “There was a reversal of this trend subsequently, Trump having denied this story, (…) the dollar therefore regained some ground”explained Mr. Osborne. “The Washington Post article, citing supposedly anonymous sources that do not exist, falsely states that my pricing policy will be reduced”declared on his Truth Social platform, Donald Trump, who must be inaugurated on January 20. And to add: “The Washington Post knows this is false. This is yet another example of “fake news.”
Threat of a trade war
If customs duties are not as high as expected, “the euro might not be as negatively affected” by the arrival of Trump, and American inflation will not accelerate as much, which means that “the Federal Reserve (Fed) might feel confident enough to cut interest rates more quickly”said Susannah Streeter, of Hargreaves Lansdown. Furthermore, added the analyst, interviewed by AFP, certain countries concerned have “acted in other areas to alleviate some of the United States’ concerns” to reduce the threat of a trade war. The analyst cites Canada’s efforts to combat illegal immigration, Mexico to combat drug trafficking and Italy, which is moving toward a trade deal with the American astronautics company SpaceX, led by Elon Musk .
The euro experienced from the start of the session “a technical rebound against the dollar”after falling last Thursday to its lowest level since November 2022, recalls John Plassard, from Mirabaud. Market players remain awaiting the monthly report from the ADP firm on job creation in December in the private sector in the United States, on the program for Wednesday, the same day as the report of the last monetary meeting of the December Fed. The American employment report from the Department of Labor on job creations in December is expected on Friday.
Swiss
