The dollar accelerates its rise on Wednesday, particularly against the pound, as the market reacts to CNN reports that President-elect Donald Trump is considering declaring a national economic emergency in order to implement his policy of increases customs duties. Around 12:45 GMT (1:45 p.m. in Paris), the dollar jumped 1.02% against the pound, to 1.2342 dollars per pound, after the British currency reached its lowest since April 2024 against the greenback, at $1.2321. The American currency also gained 0.50% against the euro, to 1.0288 dollars per euro.
According to a CNN article published Wednesday, based on “four sources close to the case”President-elect Donald Trump is considering declaring a national economic emergency for “legally justify a wide range of universal tariffs on allies and adversaries”. Donald Trump has previously considered imposing 10 to 20% customs duties on all products entering the United States, and even up to 60 or even 100% on those coming from China. Initial announcements concerned a 25% tax on products from Canada and Mexico.
These measures, considered inflationary, could delay the schedule of rate cuts by the American central bank (Fed), which supports the dollar. The information from CNN on Wednesday propelled the dollar, John Plassard, investment specialist for Mirabaud, explained to AFP, facing a weakened pound, while the yields on 30-year British government bonds reached Wednesday a new high since 1998. This signal reflects the “fears about the strength of the British economy”putting the Labor government in difficulty, he estimated.
According to Derek Halpenny, an analyst at MUFG, investors have increased their confidence in Donald Trump’s implementation of his tariff plan since the rambling and provocative press conference he held Tuesday at his Mar-a-Lago residence in Florida. On this occasion, the Republican reiterated two other of his ambitions, those of annexing the Panama Canal and Greenland.
Penalized by this American tariff threat and in a difficult economic context in China, the onshore yuan, traded in mainland China, hit its lowest level since September 2023 against the greenback on Wednesday, at 7.3317 yuan per dollar. The renminbi, another name for the Chinese currency, is approaching its lowest level since 2007.
