The U.S. Dollar is Losing Luster: Reuters Poll

The trade wars are now a reality as Trump’s tariffs officially went live on Tuesday. The tariffs are imposed on Mexico, Canada, and China ranging between 10% to 25%, respectively. Goods such as vegetables from Mexico, wheat from Canada, toys, and T-shirts from China remain on the firing line. Consumers will soon realize the price increase as retailers could put the burden on their shoulders. While the tariffs were supposed to boost the U.S. dollar and the stock market, the opposite is becoming reality.

The U.S. dollar is now down 2.5% against a basket of major currencies this week. The DXY index, which measures the performance of the U.S. dollar with six leading currencies shows the greenback declining in value. The U.S. dollar has fallen to a five-month low of 104.28 in the charts. It last reached this level in October and is moving in reverse gear. The markets remain divided as Trump’s tariffs kick in and investors remain skeptical about the policy as it impacts free trade.

U.S. Dollar Losing Value, Says Reuters Poll

A recent poll conducted by Reuters indicates that the majority of currency analysts believe the U.S. dollar is losing luster. Tariffs are a double-edged sword that cuts both ways as the market is sending mixed signals. The poll shows that around 60% of currency strategists predict that the U.S. dollar could decline further by March end. The net-long U.S. dollar bets might turn negative and forex investors would face losses in long positions.

18 out of 31 currency strategists predict that net-long positions in the U.S. dollar are set to decline.said George Saravelos, head of FX research at Deutsche Bank.

Saravelos summed it up. The development indicates that tougher times stay ahead for the U.S. dollar in the coming months. The currency markets could experience a drastic shift and make local currencies strengthen in the indices.