The US dollar continues to be under pressure, remaining near a 3-month low against major world currencies. This is happening amid the United States implementing new tariffs on imports from Canada, Mexico, and China, which has heightened concerns about the expansion of a global trade war.
On March 4, 2025, 25% tariffs on imports from Canada and Mexico came into force, as well as an increase in tariffs on Chinese goods from 10% to 20%. These measures affect an annual import volume worth about 1.5 trillion dollars.
In response to the US actions, Canada and China announced the introduction of retaliatory tariffs on American goods. Canadian Foreign Minister Mélanie Joly announced Ottawa's readiness to take mirror measures. China also expressed its intention to impose additional tariffs on American goods.
Amid these events, the US Dollar Index (DXY) decreased by 0.1% to the level of 105.51, remaining under pressure for the third consecutive day. Earlier, the index reached a low since December 6, dropping to the level of 105.44.
Stock markets also reacted to the escalation of trade conflicts. The S&P 500 index fell by 1.2%, but futures on it showed a 0.6% rise on Wednesday. The MSCI World Stock Index declined by 1.9% for the current week.
Senior financial markets analyst at Capital.com, Kyle Rodda, noted that concerns about weakening economic activity in the US and globally are reflected in the markets, with cyclical sectors driving the sell-off. He emphasized that uncertainty is high, and both investors and American businesses and consumers are cautious in the current situation.
Thus, the escalation of trade conflicts and the introduction of new tariffs are putting significant pressure on the US dollar and global financial markets, heightening fears of a global economic slowdown.