Dollar rises at the start of weekly trading due to Trump's threats!
December 2, 2024
The US dollar witnessed a clear rise at the beginning of weekly trading, coinciding with its benefit from the threats of US President-elect Donald Trump, in which he indicated that he would impose 100% customs duties on the BRICS countries if they abandoned the dollar.
Also, the US dollar strengthened its gains in conjunction with the release of some positive US economic data that boosted demand for it, due to optimism about the strength of the US economy. Here is a look at the most important influences on the dollar’s movements: Trump’s threats support the strength of the dollar
The US dollar clearly benefited from US President-elect Donald Trump’s threats against the BRICS countries. Trump posted on Truth Social on Saturday afternoon that the idea that the BRICS countries are trying to move away from the dollar while we stand by and watch is over. He added that “we will demand that these countries commit not to create a new BRICS currency, or support any other currency to replace the strong US dollar, or they will face 100% tariffs.” These statements reinforced expectations in the markets that the dollar will maintain its strength as a global currency, which reinforced its strong performance. Positive US data strengthens the dollar
Positive US economic data clearly supported the dollar's performance, as the US Institute for Supply Management (ISM) released the November manufacturing purchasing managers' index data on Monday, which showed positive results that exceeded market expectations, recording about 48.4 points, exceeding expectations that indicated 47.7 points, achieving a significant improvement compared to the previous reading of 46.5 points in October. This data reinforced optimism about US economic performance, which provided clear support for the dollar's performance. Expectations of a US interest rate cut put pressure on the dollar
Despite the supporting factors, the dollar was negatively affected by the increase in expectations of a US interest rate cut, as the probability of the Federal Reserve cutting interest rates by 25 basis points during its next meeting was recorded at 65.9%, while the probability of keeping interest rates unchanged was recorded at 34.1%. These expectations limited the dollar’s gains and affected its performance in general. The impact of these developments on the US dollar index:
In light of these factors, the US dollar index rose by 0.68% to settle at 106.50 points. The US employment data is expected to be released this week. Read also:
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