U.S. Dollar Loses Ground Against Swiss Franc and Yen

• The dollar fell sharply against traditional safe-haven currencies. It dropped to a six-month low against the Swiss franc, while volatility against the yen surged.
• Despite a partial recovery, the dollar’s weakness reflects deepening risk aversion and fading confidence in U.S. policy direction.

Tariffs Trigger Global Trade Disruption

• President Trump’s sweeping tariffs on key trading partners have triggered a chain reaction of retaliatory measures.
• The European Commission proposed counter-tariffs of 25 percent on U.S. goods, while China imposed a blanket 34 percent levy.
• These measures are disrupting supply chains and raising the risk of a synchronized global slowdown.

Questioning the Dollar’s Safe-Haven Status

• The dollar’s traditional role as a safe-haven currency is being tested. Market participants are reassessing its stability amid mounting domestic and international uncertainty.
• Strategists suggest that the long-term perception of the U.S. dollar as the world’s reserve currency could be at risk.

Expectations for Federal Reserve Rate Cuts Rise Sharply

• Market pricing now reflects a 65 percent probability of a Federal Reserve rate cut in May, with up to 100 basis points of cuts expected by year-end.
• While Chair Powell has remained cautious, the market is signaling a strong belief that monetary easing will be needed to support growth.

Euro and Pound Show Relative Weakness

• The euro and British pound both struggled despite the dollar’s weakness.
• The euro erased intraday gains to close lower, while the pound dropped to a one-month low. Investors are increasingly concerned about Europe’s vulnerability to external shocks and sluggish domestic growth.

Global Equities Under Pressure

• U.S. stocks have lost nearly six trillion dollars in market value over the past week. Increased volatility and deteriorating sentiment reflect growing concerns about the economic implications of an extended trade conflict.

What’s Next?

• This moment is not just about currency movements or central bank policy—it is about trust. Investors are clearly seeking stability, but not necessarily in the dollar