Today's Edition
SINGAPORE (REUTERS)
The safe havens yen and Swiss franc held near six-month highs on Tuesday while the US dollar nursed broad losses as financial markets grappled with mounting recession worries in the wake of President Donald Trump's sweeping tariffs.
The currency markets were fragile but eerily calm in Asian trade after a volatile 24-hour period where the dollar reversed heavy losses against the safe haven currencies.
Global shares have plummeted since Trump announced tariffs last week. China and the European Union swiftly hit back by proposing higher tariffs of their own, which Trump in turn threatened to fight with even higher duties.
In currencies, investors have flocked to the Japanese yen and Swiss franc in the past week, seeking shelter from the market turmoil in traditional safe havens.
The yen was last slightly stronger at 147.325 per dollar, near the six-month high of 144.82 touched on Friday.
The Swiss franc last fetched 0.85665 per US dollar, also near a six-month high touched in the previous session.
While the dollar is typically known as a safe-haven asset, that status seems to be eroding as uncertainty over tariffs and concern over their impact on US growth intensify.
The euro rose 0.58% to $1.0967, not far from the six-month high it hit last week, while sterling was 0.44% higher at $1.27795, inching away from the one-month low it touched in the previous session.
Chief investment officer at Lonsec Investment Solutions, Nathan Lim, said, "The current volatility is entirely the result of the policy choices of the Trump administration, meaning that if reversed, the impact on financial markets will likely reverse as well."
Investors are wagering that the rising risk of an economic downturn could lead to a cut in US interest rates as early as May and with more easing priced in this year, that would erode the dollar's yield advantage.
The dollar index, which measures the US currencies against six other units, was 0.44% lower on Tuesday. The index is down over 1% since the tariffs were announced last week.
