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(Bloomberg) -- The dollar has wiped out all of its gains since Donald Trump won the presidency in November as his aggressive tariffs upend global markets.
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The Bloomberg Dollar Spot Index is hovering near its lowest since mid-October, right before the election, after tumbling in the wake of Trump’s tariffs announcement. While the currency recovered modestly in Friday trading, market volatility picked up again after China retaliated with levies on American imports.
The greenback is on track for its worst week in a month, with the world’s primary reserve currency plunging alongside global bond yields and equities. The concern about tariffs overshadowed a solid report on US jobs Friday. Nonfarm payrolls increased above all estimates in a Bloomberg survey of economists.
“Markets are more driven by the sentiment around tariffs and the potential hit to US growth from tariffs rather than hard macro data,” said Jayati Bharadwaj, a currency strategist at TD Securities.
The $7.5 trillion a day foreign-exchange market had been on edge leading up to Trump’s April 2 tariff announcement, with a few false starts on levies muddying the outlook. Trump’s push to roll back decades of globalization and subsequent measures have led investors to bet against the dollar.
“Fundamentally the picture has changed,” said Meera Chandan, co-head of global FX strategy at JPMorgan Chase & Co. “At a minimum, it’s a cyclical change, but potentially it could be the start of a structural weakening in the dollar because we’ve come off a very long period of dollar strength.”
Safe-haven currencies, the Swiss franc and the Japanese yen, outperformed all peers in the Group of 10, while the Australian dollar fell 3.2% Friday after China’s retaliatory measures announcement. It’s the worst drop for the Aussie since March 2020.
Canada’s labor market unexpectedly weakened in March, shedding the most jobs in more than three years, according to a Friday report. The Canadian dollar fell as much as 1% Friday after three days of advances.
It’s all a stark contrast to earlier this year when Trump’s tax cuts and tariffs were seen as a reason to bet on a rally in the dollar. In February, US Treasury Secretary Scott Bessent said that “the strong-dollar policy is completely intact with President Trump.”