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9:59 AM · 2 December 2024

Chart of the day - USDIDX (02.12.2024)

The USDIDX dollar index rebounds from a key support zone. The rebound is supported by threats from future U.S. President Donald Trump to impose 100% tariffs on BRICS member countries.

The U.S. dollar is gaining 0.54% today, reaching 106.3800 points. A strong dollar is driving an increase in U.S. bond yields, a slight decline in equity index futures, and a sell-off in the cryptocurrency market. The rise in the dollar's value is likely influenced by Donald Trump's comments about the idea of introducing a new currency under the BRICS collaboration framework. BRICS currently includes China, Russia, Brazil, India, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates. Trump stated that if these countries continue their work on introducing a common currency and moving away from the USD, they must face the risk of 100% tariffs.

The primary driver of recent gains in the dollar has been the market's pricing of Donald Trump's anticipated protectionist policies. Therefore, it is no surprise that the dollar is rising again in response to further reports of potential tariffs.

This week, we will also see labor market data from the U.S., which could have a significant impact on the USD. These will be the final labor market reports before the FOMC decision in mid-December. Currently, the market is pricing in a 67.1% chance of another 25-basis-point rate cut.

 

Source: xStation 5

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