Can dollar get weaker in global trading with Trump’s ‘tariff’?

Loss of stock exchanges contributes to the weakening of the dollar. The recent declines of the stock rates around the world should keep the dollar as a safe currency. However, this is not what happened in recent weeks. “We saw the euro and the yen stand out,” says André Valério, senior economist of Inter.

The movement suggests that the current uncertainty caused by tariff policy has made investors global fear of the US economy, seeking greater liquidity and alternatives to the dollar.
André Valério, Senior Economist at Inter

Emot with the US BC expands uncertainty. Rumors that Trump studies firing Federal Reserve President Jerome Powell also contribute to the loss of dollar strength. The offensive arises after Powell claims that “tariff” makes it difficult to control inflation and prevent interest reduction. For Trump, the maintenance of rates impairs the development of the economy.

Real and Yuan do not accompany appreciation. The Brazilian (-2.58%) and Chinese (-0.63%) coins have lost value compared to the dollar since the “tariff” announcement. “It is noted that the Asian country invests much more in occupying spaces in the world product market and may be no interest in the power gap left by the US,” says Mello.

Will dollar be replaced?

Effective threat to the dollar remains distant. Even with the recent devaluation before some pairs, the currency of the world’s largest economy will follow, in the short term, as the most used in international transactions. “It is still early to say that this movement (devaluation of the dollar) is structural,” says Valério.