Dollar firms against peers as investors brace for Trump tariff deadline
Most U.S. trade partners face the prospect of steeper duties at the end of the 90-day moratorium on U.S. President Donald Trump's "Liberation Day" reciprocal tariffs on Wednesday.
Trump clarified on Sunday that the new rates would take effect from August 1.
He said he will name some dozen countries later on Monday that are receiving letters with their new, higher levies, and he threatened an additional 10 per cent tariff on nations aligning with what he deemed to be the "anti-American" policies of the BRICS emerging economies.
"It still feels like this administration is trying to find ways to avoid going all out on fresh tariff positions. We have people talking a (lot) about it, but talking and doing are two entirely different things," said Chris Beauchamp, chief market analyst at IG.
"They (the United States) saw what happened with the volatility in April, and I don't think they want to wish that again."
Options data reflected that currency markets were pricing in a limited resurgence in volatility ahead of the tariff deadline on expectations further extensions on the deadline were possible.
The dollar index, which measures the currency against six major counterparts, rose 0.34 per cent to 97.294 and briefly hit a one-week high.
The index extended gains from last week when data reflecting labour market resilience pushed back expectations for imminent monetary policy easing by the Federal Reserve.
Still, the index is close to a 3-1/2-year trough and has declined 10 per cent so far this year as investors questioned the safe-haven status of the U.S. currency and reassessed earlier expectations that the U.S. could be spared in the event of a global economic slowdown.
The dollar inched up 0.25 per cent to 0.797 against the Swiss franc on Monday, near the January 2015 low it revisited in the previous week.
The euro slipped 0.41 per cent to $1.1738 having rallied over 13 per cent so far this year. The dollar reversed an earlier decline and rose 0.78 per cent at 145.725 yen, reaching a one-week high.
Investors are concerned that Tokyo and Brussels might not be able to secure deals with Washington ahead of the deadline as progress on agreements with Japan and the European Union has been slow, despite multiple rounds of negotiations.
Sterling weakened 0.08 per cent to $1.364, but stayed near its strongest level since October 2021.
Currencies positively correlated to risk appetite, such as the Aussie dollar and the New Zealand dollar lost 0.61 per cent and 0.63 per cent, respectively ahead of monetary policy decisions in both countries in the coming two days.
The Reserve Bank of Australia is widely expected to cut the cash rate by another quarter point on Tuesday, while New Zealand's central bank is predicted to hold rates steady on Wednesday.
U.S. policy uncertainty weighing on the dollar "may not be as potent as in early April, but we think this correlation still matters," Paul Mackel, global head of FX research at HSBC said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
2 hours ago
- CNA
SpaceX to invest $2 billion in Musk's xAI startup, WSJ reports
SpaceX has agreed to invest $2 billion in Elon Musk's AI startup xAI, marking one of its largest external investments and nearly half of xAI's recent $5 billion equity raise, the Wall Street Journal reported on Saturday.
Straits Times
3 hours ago
- Straits Times
While You Were Sleeping: 5 stories you might have missed, July 13, 2025
Sign up now: Get ST's newsletters delivered to your inbox US President Donald Trump has threatened a 30 per cent tariff on European goods starting Aug 1, unless the US and EU agree a trade deal. EU says it still wants US trade deal, will defend interests The European Union said on July 12 it was ready to retaliate to defend its interests if the United States pressed ahead with imposing a 30 per cent tariff on European goods from Aug 1. US President Donald Trump latest salvo surprised the bloc, the United States' largest trading partner, which had hoped to avoid an escalating trade war after intense negotiations and increasingly warm words from the White House. Dr Ursula von der Leyen, head of the EU executive which handles trade policy for the 27 member states, said the bloc was ready to keep working towards an agreement before Aug 1, but was willing to stand firm. EU ambassadors will discuss next steps on July 13, before trade ministers meet in Brussels on July 14 for an extraordinary meeting. READ MORE HERE Gaza truce talks in the balance as sides trade blame PHOTO: AFP Gaza ceasefire talks hung in the balance as Hamas and Israel on July 12 accused the other of blocking attempts to strike a deal, nearly a week into an attempt to halt 21 months of bitter fighting in the Palestinian territory. A Palestinian source with knowledge of the indirect talks in Qatar told AFP that Israel's proposals to keep its troops in the war-torn territory were holding up a deal for a 60-day pause. Top stories Swipe. Select. Stay informed. Singapore Government looking at enhancing laws around vaping to tackle issue of drug-laced vapes in Singapore Singapore Why the vape scourge in Singapore concerns everyone Singapore Organised crime groups pushing drug-laced vapes in Asia including Singapore: UN Singapore I lost my daughter to Kpod addiction: Father of 19-year-old shares heartbreak and lessons Singapore Prison school to NUS: At 36, former drug abuser finds it's never too late to get a degree Singapore Bland and boring? Some hospitals seek help from big names to enhance food menus for patients Asia Patriotism, peace and pain: The politics behind China's World War II narrative World US slaps 30% tariffs on EU and Mexico; EU warns of countermeasures But on the Israeli side, a senior political official, also speaking on condition of anonymity due to the sensitivities of the talks, accused the militants of inflexibility and deliberately trying to scuttle an accord. READ MORE HERE Trump threatens to revoke Rosie O'Donnell's citizenship US President Donald Trump on July 12 said he might revoke talk show host Rosie O'Donnell's US citizenship after she criticised his administration's handling of weather forecasting agencies in the wake of the deadly Texas floods, the latest salvo in a years-long feud the two have waged over social media. 'Because of the fact that Rosie O'Donnell is not in the best interests of our Great Country, I am giving serious consideration to taking away her Citizenship,' Mr Trump wrote on his Truth Social platform, invoking a deportation rationale the administration has used in attempts to remove foreign-born protesters from the country. 'She is a Threat to Humanity, and should remain in the wonderful Country of Ireland, if they want her. GOD BLESS AMERICA!' he added. READ MORE HERE Japan's Hokkaido issues highest-level bear warning PHOTO ILLUSTRATION: UNSPLASH Hokkaido on July 12 issued a strong warning of brown bears in one of its towns after a fatal attack on a newspaper deliveryman there, making it the first time that the highest level of alert has been sent out in the northern prefecture. The warning, affecting the town of Fukushima in south-western Hokkaido, is expected to be effective for a month through Aug 11. The highest level of a three-stage alert is issued when a bear attacks a human in an urban area or its vicinity. READ MORE HERE Iga Swiatek revels in special Wimbledon triumph PHOTO: AFP Iga Swiatek bulldozed her way to a maiden Wimbledon title on July 12 to take her Grand Slam tally to six and although the Pole preferred not to rank her wins, she said her latest one felt a little more special than the others. The 24-year-old has won four Suzanne Lenglen Cups in the last six editions of the French Open to establish herself as the 'Queen of Clay' and conquered the hardcourts of the US Open in 2022, but the grasscourts of Wimbledon have always proved slippery. Having crossed the quarter-final hurdle for the first time this year, she brutally dismantled Amanda Anisimova 6-0 6-0 in the final to confirm herself as a versatile virtuoso of the women's game.
CNA
3 hours ago
- CNA
Commentary: Companies are getting worse at laying people off
NEW YORK: The latest jobs numbers in the United States may have shown a drop in the number of pink slips hitting workers' desks in May, but don't be fooled: Layoffs are alive and well in 2025. In the first half of the year, US employers let go of nearly 745,000 people, according to outplacement firm Challenger, Gray & Christmas. That's the second-highest number for the period since 2009 – surpassed only by the first six months of 2020, when COVID-19 essentially shut down the global economy. The cuts are part of a broader trend. About 20 per cent of S&P 500 companies have fewer employees today than they did a decade ago, according to a recent Wall Street Journal analysis. Yet even after years of practice slashing payrolls, most companies are still shockingly bad at it. SUCKING THE HUMANITY OUT OF LAYOFFS In fact, it's the frequency and volume of workforce cuts that seem to be making them even worse; normalising the practice has ended up sucking the humanity right out of it. Case in point: dating app Bumble, which last week announced that it was laying off 240 employees, 30 per cent of its workforce. When employees, who received the news via video call, responded with thumbs-down emojis, founder and CEO Whitney Wolfe Herd told them: 'Y'all need to calm down,' adding, 'Everyone's going to have to be adults in dealing with this.' I'm not sure what kind of response Herd expected. A thumbs-down is a much more work appropriate alternative to the digit they could have thrown her way – especially considering what we know about the impact layoffs have on both those let go and those left behind. (My colleague Sarah Green Carmichael has written extensively on these detrimental effects.) Also last week, executives at Microsoft showed their own flavour of callousness when they announced they would lay off 9,000 workers. That's on top of the 6,000 the company laid off in May. That Microsoft couldn't figure out the total number it would need to cut two months earlier suggests both sloppiness and thoughtlessness. Layoff survivors will now live in a constant state of anxiety that additional downsizing could be right around the corner. A SMALL PERCENTAGE CAN STILL BE THOUSANDS OF PEOPLE AI has only made matters worse. It's become a justification for layoffs, while also letting companies outsource the work of empathy to an LLM. An executive producer with Microsoft's Xbox, which was heavily impacted by the cuts, wrote a LinkedIn post offering some AI prompts that would 'help reduce the emotional and cognitive load that comes with job loss'. He's since deleted the post. Microsoft pointed out the most recently announced cuts are less than 4 per cent of the company's total workforce. That's still thousands of people, and is the kind of justification Harvard Business School professor Sandra Sucher sees as an increase in 'moral disengagement' on the part of CEOs. She told me the big bosses have become so far removed from the average employee that they 'don't seem to understand what it means for someone to lose their job'. Layoffs are increasingly 'stripped of any acknowledgement that harm is being done,' she added. A CRISIS OF TRUST It's the layoff edition of a broader phenomenon I've been following among America's CEOs: the end of the era of corporate do-gooderism and make-the-world-a-better-place discourse. Empathetic leadership, all the rage during the COVID-19 era, isn't part of the conversation anymore. And the lack of respect that employees have subsequently felt from their employers is accelerating a crisis of trust in big business. Meta CEO Mark Zuckerberg has come to embody this leadership transformation. In 2022, when the company cut 11,000 employees, Zuckerberg – as was the practice of many CEOs at the time – took accountability for poor decision making. 'I know this is tough for everyone, and I'm especially sorry to those impacted,' he said. Fast forward to January 2025, when Zuckerberg said he was cutting about 5 per cent of staff by moving out 'low performers'. The blame had been shifted. There was no acknowledgement of what such a public statement might mean for the future job hunts of those impacted, and certainly no 'I'm sorry'. As Zuckerberg has said, he is done apologising.
