The dollar continued to gain ground against other major currencies on Friday following US President Donald Trump’s imposition of higher tariff rates on dozens of trading partners, heading for its finest weekly performance in nearly three years.
Some of the hardest-hit nations saw a significant decline in their currency, like Switzerland, which currently faces a 39% rate. The Canadian dollar was on the verge of a seventh consecutive weekly decline, while the Swiss franc hit its lowest level in six weeks.
Aside from tariffs, other factors also contributed to the dollar’s increase versus other currencies. Finance Minister Katsunobu Kato said on Friday that authorities were “alarmed” by currency movements after the Bank of Japan signaled it was not in a rush to start interest rate rises, sending the yen down for its worst weekly loss this year. Additionally, on Friday, the US releases its monthly employment report, which is anticipated to reveal that 110,000 new employees were added to nonfarm payrolls in July. The belief among investors that Trump’s tariffs have not yet significantly reduced inflation or sunk the economy has contributed substantially to the dollar’s gain this month.
Despite Trump’s pressure on Chair Jerome Powell to lower interest rates, the Fed has stated it is not in a rush to do so. Chris Beauchamp, an IG analyst, says Friday’s payrolls report might not have a significant impact on that assumption, even if a lower number prompts some selling of US assets like the dollar.
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