The dollar rate today has fallen and is heading towards the worst weekly loss in more than a year following President Trump's hints at a more lenient stance regarding tariffs on China, which added uncertainty to the United States' trade policy. The yen appreciated its morning strengthening against the dollar after the Bank of Japan raised rates today and changed the inflation forecast towards higher increases without prior indications about the timing and pace of future rate hikes. Investors began selling dollars after Trump did not immediately introduce announced tariffs, violating the same commitments made by him during the pre-election campaign. In an interview with Fox News yesterday evening, Trump stated that he would prefer not to resort to the introduction of trade duties on China, and that he sees the possibility of achieving a trade agreement with Beijing.
Francesco Bisol, a currency strategist at IG, stated: "It seems that this eases the feeling that Trump is not planning to fulfill his obligations to protect tariffs, as he promised before taking office, and some tariff threats may ultimately not come to pass if some compromises are reached in trade negotiations." The yuan received support from Trump’s statement and climbed against local currencies to an eight-week maximum, reaching a level of 7.2370 dollars. The U.S. president stated yesterday that he wants the Federal Reserve (the central bank of the U.S.) to lower interest rates.
Trump's statements came just days ahead of the first meeting of the Fed on monetary policy since his inauguration, and it is expected that officials will leave interest rates unchanged. The dollar index, which measures the performance of the American currency against six major currencies, is heading towards its most significant weekly loss since November 2023, with an expected decline of more than 1.6% over the week. The index reached a monthly minimum at the level of 107.27 today, on Friday, and fell in the last trades by 0.5% to 107.6. The euro rose by 0.65%, reaching its highest level since December 17, at a rate of 1.0515 dollars. The euro is aiming for an increase of two percent for the week. Data showed that trading activity in the eurozone began the new year with a return to growth from a low pace. The pound strengthened by 0.5%, reaching the mark of 1.2417 dollars, also continuing to rise for the second consecutive week after three weekly losses. The Bank of Japan raised interest rates by 25 basis points following a two-day meeting on monetary policy. The yen appreciated to 154.845 against the dollar following the decision on monetary policy, but lost its position after the press conference of the head of the Bank of Japan, at which he hinted that the central bank would not rush to tighten monetary policy further.
Among cryptocurrencies, bitcoin rose by 2.2% to 105,435 dollars in recent trades.
