Dollar Dominates with Unstoppable Climb Amid Global Trade Tensions

The U.S. dollar surged to its highest weekly performance in nearly three years amid new tariff impositions by President Trump. Contributing factors include the weakening of the yen and trade tensions affecting global currencies. Market reactions reflect broader impacts on emerging markets and ongoing issues with the EU-U.S. trade agreement.

The U.S. dollar is experiencing its most impressive weekly performance in nearly three years, following heightened tariff rates implemented by President Donald Trump on various trade partners. This surge is compounded by non-tariff influences, including the yen's downturn triggered by Japan's delayed interest rate hikes.

Japan's Finance Minister Katsunobu Kato expressed concern over these currency shifts, as the yen fell to its lowest level since March. The U.S. dollar index is set to rise by 2.4% this week, marking its best performance since September 2022. Market reactions were mixed, with countries like Canada and Switzerland experiencing significant tariff hits.

In Asia, emerging market currencies suffered due to the tariff effects. European currencies, notably the euro, struggled under the weight of what is seen as an imbalanced EU-U.S. trade deal. Despite political tensions and criticism of Federal Reserve policies, the U.S. dollar remains robust, with payroll data to be released soon potentially impacting this trend.

(With inputs from agencies.)