The forex market started the week with the U.S. dollar on the back foot. Concerns over U.S. tariffs and a weakening labor market weighed on investor sentiment. As a result, traders turned to safe-haven currencies, boosting the yen and the Swiss franc.
Last week, the dollar experienced significant losses, falling over 3% against major rivals. This decline was the worst since November 2022. Investors have grown cautious as trade tensions escalate and fears of an economic slowdown intensify.
Risk-averse traders have increased their holdings of yen and Swiss franc, sending both currencies to multi-month highs. On Monday, the yen strengthened by 0.5%, trading at 147.27 per dollar. This level was just below the five-month high reached last Friday.
Similarly, the Swiss franc hit a three-month peak at $0.87665. Meanwhile, the euro also gained, rising by 0.3% to $1.086725, as Germany’s fiscal reforms boosted market confidence.
The dollar index, which measures the greenback against six major currencies, was at 103.59. This level remained near the four-month low touched last week, reflecting the dollar’s ongoing struggles.
U.S. President Donald Trump’s trade policies have contributed to the dollar’s weakness. Recently, his administration imposed tariffs on key trading partners, only to delay some of them amid signs of economic slowdown. This uncertainty has shaken investor confidence.
In a recent interview, Trump avoided making predictions about a potential U.S. recession. However, market analysts remain cautious. IG analyst Tony Sycamore warned that volatility could persist, stating, “All the ingredients are in place for another testing week ahead.”
On Friday, the U.S. labor market data showed mixed signals. Nonfarm payrolls increased by 151,000 jobs in February, slightly below expectations. Additionally, the unemployment rate rose, and labor force participation declined. These factors suggest that the job market could weaken further in the coming months.
Economists believe that these conditions may push the Federal Reserve to cut interest rates again in May. Current market expectations suggest at least 75 basis points of rate cuts this year. Federal Reserve Chair Jerome Powell has indicated that the impact of tariffs on inflation remains uncertain, further adding to investor anxiety.
With growing economic uncertainty, forex traders should closely monitor developments in U.S. trade policy and Federal Reserve decisions. The yen and Swiss franc may continue to attract investors seeking stability. Meanwhile, the dollar’s performance will depend on how economic data and political developments unfold in the coming weeks.
📊 Stay updated with the latest forex insights and market analysis. Read more here: https://fixiomarkets.com/en/prex-blogs.
The yen and Swiss franc surged as the dollar fell on tariff and slowdown worries. Uncertainty drove investors to safe currencies.
Superior trade execution & trading conditions with the NDD method.
The online FX industry provides a platform for investors worldwide to engage in the buying and selling.
Subscribe to our daily newsletter and get the best forex trading information and markets status updates
Trade within minutes!
日本語
English
Comment (0)