The Brazilian real weakened past 5.5 per USD in July, reaching a one-month low as President Trump’s latest trade offensives of a 35% tariff on Canadian goods and the threat of broad-based 15–20% duties, right after a steep 50% levy on Brazilian exports effective August 1st, stoked fears of a sustained trade dispute that has diverted capital into dollar assets and clouded prospects for foreign-exchange inflows from Brazil’s second-largest trading partner. At home, sticky inflation—5.35% year-on-year in June, far above the 3% target—has anchored the Selic rate at a restrictive 15%, with Copom signaling a “very prolonged” pause rather than imminent cuts, dampening prospects for monetary relief. Yet Brazil’s policy fundamentals have offered a degree of support with sturdy real yields, among the world’s highest, have underpinned carry-trade flows, while the Treasury’s upgraded 2025 GDP forecast of 2.5% suggest that the economy retains the resilience to withstand these external headwinds.

Brazilian Real Depreciates to 1-Month Low

The Mexican peso weakened past 18.7 per USD, retracing from its August 2024 highs after President Trump’s imposition of a 35% tariff on Canadian goods, and the threat of 15–20% duties on other partners, raised fears that similar USMCA-related measures could choke Mexico’s export engine. Simultaneously, the dollar index’s sustained rebound added further headwinds. Meanwhile, Bank of Mexico minutes from June revealed that, despite 325 bp of rate cuts since early 2024, policymakers are now inclined toward modest quarter-point reductions as headline inflation remains elevated at 4.32%, well above their 3% target, undermining expectations of a more supportive monetary stance. Remittance inflows, a crucial source of foreign exchange, are under pressure as US Senate talks of a remittance tax, stripping the peso of its usual seasonal reprieve and leaving it vulnerable to ongoing dollar strength.

Mexican Peso Drops After US Tariff Surprise

The Canadian dollar weakened toward 1.37 per US dollar after President Trump’s late-week proclamation of a 35% tariff on all non-USMCA Canadian goods, set to take effect August?1, reignited concerns over Canada’s export access and magnified trade-policy uncertainty. By invoking Ottawa’s retaliatory levies and what he characterized as a lack of “cooperative spirit,” Trump’s escalation piles fresh pressure on Canada to clinch a new agreement before the deadline, adding to the existing 50% duties on Canadian steel and aluminium—where Canada remains America’s top supplier. However, Canada’s domestic economy offered a counterpoint: June’s labour report surprised decisively, with 83,100 jobs created and the unemployment rate dipping to 6.9%, a showing that has tempered market odds for a Bank of Canada rate cut at its July?30 meeting and provided the loonie with an undercurrent of support despite the trade-war headwinds.

Canadian Dollar Pressured by US Tariffs

The South African rand depreciated nearly 1% to around 17.9 per USD, reaching the lowest since June 20, pressured by a stronger greenback after President Trump issued fresh tariff threats. Potential tariffs on South African exports, including a 30% tariff and a 50% copper import tariff, could significantly impact the country's commodity sectors. The South African government is trying to negotiate a trade deal before an extended deadline of August 1. The country also faces an additional 10% tariff because of its membership of the BRICS group which President Trump described as "anti-American".

South African Rand Weakens

The euro slipped below $1.17, retreating from the 2021 highs reached last month, as mounting trade tensions continued to dampen investor sentiment. The US President signalled that the European Union would soon receive a letter outlining the specific tariff rates it will face, suggesting that the EU’s efforts to secure a trade deal by the August 1st deadline are faltering. He also signaled plans to impose broad-based tariffs of 15% to 20% on most trading partners, casting further doubt on earlier expectations of a baseline rate of 10%. Despite the recent decline in the first half of July, the euro has gained nearly 13% against the dollar so far this year, supported by broad dollar weakness and renewed hopes for an economic revival, particularly following Germany’s shift toward more fiscal spending. On the monetary policy front, the ECB is widely expected to keep interest rates unchanged this month, but markets still anticipate at least one more reduction later this year.

Euro Retreats from 2021-Highs

The British pound fell to $1.354, its lowest in over two weeks, after the UK economy contracted for the second straight month. GDP shrank 0.1% in May, missing expectations for 0.1% growth, following a 0.3% drop in April. The back-to-back declines raise fears of a second-quarter contraction. Manufacturing output weakened notably, while tax hikes and global trade tensions added to the drag. In April, US President Donald Trump imposed sweeping tariffs, including a 10% levy on UK goods despite a relatively balanced goods trade. The UK has since secured a trade deal with the US, ahead of the EU. However, growth momentum is fading. After a strong Q1 GDP rise of 0.7% economists expect slower growth ahead. The Bank of England, which has cut rates from 5.25% to 4.25% over the past year, is now seen almost certain to ease again in August, even with inflation above 3%. Governor Bailey has indicated a gradual rate path lower, but stopped short of committing to August action.

Sterling Falls to Over 2-Week Low after GDP Contraction

The offshore yuan strengthened past 7.16 per dollar on Friday, extending gains from the previous session, supported by the robust fixing from the People’s Bank of China. The central bank set the daily midpoint at 7.1475, stronger than the expected 7.1771, signaling continued policy support for the currency. Meanwhile, Australian Prime Minister Anthony Albanese announced plans to meet Chinese President Xi Jinping during an upcoming trip aimed at strengthening business ties. In China, investors are bracing for key economic releases next week. In particular, Q2 GDP and trade figures are expected to provide valuable insights into the impact of evolving US-China trade tensions. Despite Friday’s gains, the currency is on track to snap a three-week winning streak.

Offshore Yuan Gains, Still Set for Weekly Loss

The Japanese yen weakened toward 147 per US dollar on Friday, nearing a three-week low as the greenback gained strength amid rising global trade tensions. The move followed a series of aggressive tariff announcements by US President Donald Trump, including a 35% levy on Canadian imports and plans for 15% to 20% blanket tariffs on most other trade partners. Tensions between the US and Japan also remained in focus. Earlier this week, Trump unveiled a 25% tariff on Japanese goods, set to take effect on August 1, further straining bilateral ties. In response, Japanese Prime Minister Shigeru Ishiba stressed the need to reduce the country's reliance on the US in strategic areas such as defense, food security, and energy. He described the ongoing negotiations as a “battle in which national interest is at stake.” A leading Japanese think tank projected that the tariffs could cut Japan’s GDP by 0.8% in 2025 and by 1.9% cumulatively through 2029.

Japanese Yen Slides Amid Escalating Trade Tensions

The New Zealand dollar depreciated to around $0.602 on Friday, ending a two-day gain, as risk sentiment soured following renewed tariff threats from US President Donald Trump. On Thursday, Trump said the US planned to impose blanket tariffs of 15% or 20% on most other trade partners—a move that poses fresh challenges for New Zealand, which had been facing just a 10% levy. On the monetary policy front, the Reserve Bank of New Zealand this week held its official cash rate steady at 3.25% as widely expected, though it left the door open for a potential rate cut in August should economic conditions evolve as anticipated. Markets are pricing in a 65% chance of a quarter-point cut next month, with nearly even odds of a further reduction to 2.75% later this year. The kiwi is down 0.6% so far this week, on track to snap a two-week run of gains.

New Zealand Dollar Edges Lower

The South Korean won held steady around 1,373 per dollar on Friday, following a recent rise in the country’s 10-year government bond yield to 3.15%, the highest level since November 2024. The uptick in yields reflected shifting investor expectations amid lingering uncertainty over domestic monetary policy and inflation outlook. Domestically, investor sentiment was weighed down by renewed concerns over imbalances in the housing market resurfaced after the Bank of Korea reported a $4.5 billion surge in mortgage lending for June, the largest monthly increase in nine months. Loan growth has exceeded 4% year-on-year for four straight months, raising questions about the effectiveness of current macroprudential measures. In response, authorities have stepped up efforts to curb speculative activity. Financial regulators introduced a KRW 600 million mortgage cap and tightened lending standards as part of broader efforts to cool the housing market and mitigate financial risks.

South Korean Won Steadies Amid Yield Gains

The Australian dollar weakened to below $0.658 on Friday, ending its three consecutive session of gains, as investor sentiment turned cautious following a fresh wave of global trade tensions sparked by US President Donald Trump. On Thursday, Trump announced a 35% tariff on Canadian imports starting August 1, citing Ottawa’s retaliatory tariffs. He also signaled plans to impose blanket tariffs of 15% to 20% on most other trade partners — a further blow to Australia, which relies heavily on free trade for its commodity exports and is currently subject to a 10% levy. On the policy front, the Aussie had been supported by the Reserve Bank of Australia’s surprise decision to maintain rates at 3.85%. However, rate cut expectations for August are firming, with markets now pricing in an 89% chance, though much hinges on Q2 inflation data due July 30. A 0.6%–0.7% rise in core inflation would likely clear the way for a cut, while a stronger reading could delay easing.

Aussie Dollar Ends 3-Day Win Streak

The US dollar index climbed toward 98 on Friday, on track for a nearly 1% weekly gain, as investors responded to fresh tariff announcements and evolving monetary policy signals. President Trump ramped up trade tensions throughout the week, unveiling a 35% tariff on Canadian imports starting August 1 and signaling 15% to 20% blanket tariffs on most other trading partners. Earlier in the week, the administration also announced 50% duties on copper imports and Brazilian goods, all set to take effect on the same date. On the monetary policy front, Chicago Fed's Goolsbee pushed back against the idea of rate cuts to ease government debt burdens, emphasizing that the Federal Reserve’s dual mandate remains focused on employment and price stability. Meanwhile, the latest weekly jobless claims data continued to point to a labor market that remains solid but is showing signs of cooling. The dollar posted its strongest gain against the yen this week, while also advancing sharply against the euro.

Dollar Set for Weekly Advance

The Canadian dollar weakened past 1.37 per US dollar on Friday, hitting a two-week low after US President Donald Trump announced a steep 35% tariff on Canadian imports, set to take effect on August 1. Trump cited Canada’s retaliatory tariffs and unwillingness to cooperate with Washington as justification for the move, intensifying pressure on Ottawa to reach a trade agreement before the deadline. The latest measures add to existing 50% tariffs on Canadian steel and aluminum—Canada being the largest supplier of both metals to the US. Economic data further weighed on sentiment, as Canada’s merchandise trade deficit widened in June, while private-sector activity contracted for the seventh straight month, underscoring weak growth momentum and clouding the outlook for Bank of Canada monetary policy. Meanwhile, oil prices pulled back from their recent highs despite ongoing production discipline from OPEC+, removing a key pillar of support for the energy-sensitive loonie.

Canadian Dollar Weakens as Trump Announces 35% Tariff

The Venezuelan Bolivar touched 14.00 against the USD, the highest since December 2022. Over the past 4 weeks, Venezuelan Bolivar lost 86.03%, and in the last 12 months, it decreased 61.63%.

Venezuelan Bolivar Hits 31-month High

AUDUSD increased to 0.66, the highest since November 2024. Over the past 4 weeks, Australian Dollar US Dollar gained 1.37%, and in the last 12 months, it decreased 2.66%.

Australian Dollar Hits 34-week High

The Mexican peso weakened past 18.65 per USD, easing from its August 2024 highs as fresh US tariff threats have put key Mexican exports at risk and bolstered the greenback. President Trump’s confirmation of 50% duties on copper—a sector in which Mexico ranks among the world’s top suppliers—alongside veiled warnings of similar levies on pharmaceuticals and semiconductors, has imperiled export revenues for the country’s mining and manufacturing industries. At the same time, US Fed minutes signaled that while rate cuts may still occur later this year, officials remain wary of trade-driven inflation, sustaining demand for the US dollar. However, the peso’s decline has been limited by Banco de México’s hawkish outlook after June’s core inflation unexpectedly rose to 4.24%, the highest since April 2024, and robust external balances—evident in a January–May trade surplus above $9 billion and record $5.7 billion in June remittances.

Mexican Peso Pressured by Tariff Threats

The Canadian dollar slid past 1.37 per USD, marking a two-week low, after President Trump confirmed 50% copper tariffs effective August?1st and threatened similar duties on semiconductors, pharmaceuticals—pressuring foreign-exchange inflows from Canada’s largest trading partner and hampering revenue and investment in key export industries such as energy, mining, automotive, aluminum, and lumber. Meanwhile, the US Fed minutes from June revealed that most policymakers still favor rate cuts later this year but remain divided over the inflationary impact of tariffs, reinforcing the dollar’s resilience. At home, June’s merchandise trade deficit widened even as private-sector activity contracted for a seventh consecutive month, highlighting Canada’s faltering growth and suggesting the Bank of Canada may pause before loosening policy. Elsewhere, oil prices retreated from their summer peak despite OPEC+ production discipline, removing a key source of support for the CAD.

Loonie Weakens to 2-Week Low

The dollar index was little changed around 97.5 on Thursday, with tariff headlines continuing to dominate the news. President Trump announced a 50% tariff on Brazilian imports and confirmed that a similar 50% tariff on copper imports will take effect on August 1. Meanwhile, minutes from the last FOMC meeting showed most policymakers still expect to cut rates this year, though views remain divided—some see a cut as soon as July, while others believe no reductions are warranted. Officials were also split on the inflationary impact of tariffs. CPI figures for June are due next week. On the economic front, initial jobless claims unexpectedly fell by 5K to 237K last week, while continuing claims rose to 1.965 million, the highest level since 2021. The data continued to point to a labor market that remains solid but is showing signs of cooling. The greenback was gaining against the euro and the sterling but weakened against the Swiss franc

Dollar Hovers Around 97.5

The Brazilian real plunged past the 5.6 per USD mark, tracking the selloff in Brazilian assets after US President Trump tariffed Brazilian imports by 50%. Trump cited the Brazilian Supreme Court's "Witch Hunt" of former President Bolsonaro, currently prosecuted for an attempted coup, despite having a stable trade surplus with Brazil. The move marked an aggressive increase from the previous tariff level 10%, pressuring the outlook of foreign exchange inflows from Brazil's second largest trading partner, and hampering revenue and investment on key export industries of energy, iron, steel, machinery, soy, softs, and aircraft and parts. The currency had rallied over 12% this year amid the broad dollar weakness and higher carry trade appeal after fiscal concerns drove the Central Bank of Brazil to hike its benchmark Selic rate to 15%, resulting in one of the highest real interest rates globally. The central bank was due to hold the rate as June inflation held above target at 5.35%.

Brazilian Real Extends Slide on 50% US Tariffs

The Swiss franc traded around 0.795 per USD, holding close to its strongest level since July 2011, benefiting from its safe-haven status amid ongoing trade uncertainties. The franc has strengthened nearly 13% against the dollar this year, defying efforts by the Swiss National Bank to curb its appreciation, largely driven by sharp policy swings under the Trump administration—particularly on trade, the economy, and national security. Additionally, fading expectations of further Swiss National Bank easing have added upward pressure, following a surprise rebound in inflation. June’s consumer price index rose 0.1% year-on-year, reversing a prior decline and placing inflation back within the SNB’s 0–2% target range, a sign of stabilizing domestic conditions. SNB officials are expected to keep the interest rate unchanged at 0% in September, with many analysts anticipating it will remain at that level through 2026.

Swiss Franc Hovers Around 2011-Highs

The euro traded around $1.17, remaining near its highest levels since 2021, as traders continued to focus on ongoing trade developments. The US and the EU appear to be moving closer to a trade agreement. The EU trade chief stated that good progress had been made on a framework deal and that an agreement could be reached within days. Any potential deal is expected to include a baseline tariff of at least 10%, with possible carve-outs for key products such as Airbus aircraft. The euro has gained nearly 13% against the dollar so far this year, supported by broad dollar weakness amid concerns over President Trump’s tariffs and rising US debt levels. Investor sentiment has also been buoyed by renewed hopes for an economic revival, particularly following Germany’s shift toward more fiscal spending. On the monetary policy front, the ECB is widely expected to keep interest rates unchanged this month, but markets still anticipate at least one more reduction later this year.

Euro at $1.17

The Japanese yen appreciated to around 146 per dollar on Thursday, extending gains from the previous session as the US dollar weakened amid a sharp drop in Treasury yields. Global trade tensions also contributed to market caution as US President Donald Trump announced a 50% tariff on Brazilian imports, effective August 1, citing unfair trade practices. Meanwhile, US-Japan trade talks have stalled, particularly over Japan’s protection of its rice market. Trump recently imposed a 25% tariff on Japanese goods, also set to take effect on August 1, and ruled out any extension of the deadline. In response, Japanese Prime Minister Shigeru Ishiba called the move “truly regrettable” but reaffirmed Japan’s commitment to ongoing negotiations in pursuit of a mutually beneficial outcome. A local think tank projects the new tariffs could reduce Japan’s GDP by 0.8% in 2025 and by 1.9% cumulatively through 2029.

Japanese Yen Rises on Dollar Weakness

The Australian dollar strengthened to above $0.654 on Thursday, marking its third consecutive session of gains, as a surge in copper prices—driven by Trump’s newly announced tariffs—boosted demand for the commodity-linked currency. A 50% levy on all US copper imports, set to take effect August 1, has sent copper prices sharply higher. As one of the world’s top copper exporters, Australia stands to benefit, with higher prices supporting the Aussie due to its strong commodity ties. Additional backing came from gains in iron ore and gold, which also lifted resource-sensitive currencies. On the policy front, the Reserve Bank of Australia's surprise decision to hold rates earlier this week continued to offer support. Governor Michele Bullock flagged ongoing inflation risks from elevated unit labor costs and weak productivity, warning price pressures could exceed forecasts. Deputy Governor Andrew Hauser also noted rising global uncertainty, with tariffs expected to weigh heavily on growth.

Aussie Dollar Gains for 3rd Session

The South Korean won strengthened to around 1,374 per dollar on Thursday, recovering from the previous session’s losses as investor focus shifted to domestic monetary policy developments, supported by a weakening dollar. The Bank of Korea decided to maintain its benchmark interest rate at 2.50% during the July 10 meeting, reaffirming a prudent policy stance amid concerns over elevated household debt and accelerating home prices. These financial stability risks have prompted the implementation of stricter mortgage regulations. Looking ahead, the timing of any further policy adjustments is expected to be contingent upon evolving trends in consumer demand, housing market dynamics, and external developments, including ongoing trade tensions and US tariff policies.

South Korean Won Rises on Rate Hold Decision

The Brazilian real fell toward 5.6 per dollar, hitting a one-month low after US President Donald Trump announced a 50% tariff on Brazilian imports, effective August 1. The move, up sharply from the 10% rate imposed in April, was justified by Trump as a response to “unfair trade practices” and, notably, as retaliation for the ongoing persecution of former Brazilian President Jair Bolsonaro. In response, Brazilian President Luiz Inácio Lula da Silva vowed to retaliate under newly passed legislation authorizing proportional countermeasures. Adding to the real’s weakness, Brazil is grappling with falling prices for key exports like crude oil and iron ore, reducing foreign currency inflows. Meanwhile, a surprise widening of the June trade deficit and an unexpected contraction in industrial production have further undercut hopes for a near-term economic recovery.

Brazilian Real Drops as Trump Imposes 50% Tariff

The US dollar index fell to around 97.3 on Thursday, marking its second consecutive day of losses as investors pivoted toward riskier assets amid a broad rally in stocks and commodities. The greenback also came under pressure from a sharp drop in Treasury yields, driven by strong demand in Wednesday’s 10-year note auction. On the policy front, minutes from the Federal Reserve’s latest meeting revealed that most officials were open to cutting interest rates later this year. Despite the overall decline, the dollar surged more than 2% against the Brazilian real after President Donald Trump announced a 50% tariff on Brazilian imports, citing an “unfair trade relationship.” Trump also issued tariff notices to eight other countries, namely the Philippines, Brunei, Moldova, Algeria, Iraq, Libya, and Sri Lanka, with duties ranging from 25% to 30%, effective August 1. Markets now turn their attention to potential trade agreements with India and the European Union.

Dollar Slips Amid Risk-On Rally

The dollar index held steady around 97.5 on Wednesday as traders weighed the latest FOMC minutes and developments on the trade front. Minutes from the Federal Reserve’s June meeting showed most officials still expect to cut rates this year, though views remain divided—some see a cut as soon as July, while others believe no reductions are warranted. Officials were also split on the inflationary impact of tariffs. Markets continue to price in two quarter-point rate cuts in 2025, with September seen as the most likely timing for the first move. On the trade front, President Trump announced new tariff letters to the Philippines, Brunei, Moldova, Algeria, Iraq, Libya, and Sri Lanka imposing duties of 25% to 30% starting August 1. He also said a similar letter to Brazil would be released. On Tuesday, Trump announced plans for a 50% tariff on copper imports and hinted at further sector-specific measures. In a more aggressive move, he threatened tariffs of up to 200% on pharmaceutical imports.

Dollar Little Changed

The Mexican peso strengthened past 18.6 per USD, reaching eleven-month highs, as investors weighed persistent price pressures against strong external balances. June’s unexpected rise in core inflation to 4.24%, its highest since April 2024, has kept market expectations anchored around Banco de México’s cautious pace of rate cuts, preserving a substantial real yield cushion even after the June?26th decision to trim the policy rate by 50?bps to 8%. Meanwhile, robust foreign-exchange inflows—driven by a widening January–May trade surplus of over?$9?billion (including a $1.03?billion surplus in May) and record June remittances of $5.7?billion—have fortified the central bank’s FX reserves. Externally, the US dollar’s slight rebound on renewed tariff threats has been tempered locally by Mexico’s progress in negotiations to delay or mitigate reciprocal duties, lending exporters critical breathing room.

Mexican Peso Strengthened to 11-Month Highs

The euro held steady around $1.17, near its highest level since August 2021, as investors awaited updates on US-EU trade negotiations. The European Union aims to finalize a preliminary agreement with Washington this week to secure a 10% tariff framework beyond the August 1 deadline, while talks toward a permanent deal continue. On Tuesday, reports surfaced that the US proposed maintaining a 10% baseline tariff, with exemptions for key sectors such as aircraft and spirits. However, Washington has shown no willingness to extend exemptions to politically sensitive industries, including cars, steel, aluminum, and pharmaceuticals, despite requests from Brussels. In response, the EU is preparing retaliatory tariffs on various US goods and has warned that additional measures—such as export controls and restrictions on US companies' access to public contracts—could follow if no deal is reached. Meanwhile, in monetary policy, markets are pricing in just one more rate cut from the ECB this year.

Euro Steadies Near 4-Year High as EU, US Race to Finalize Trade Deal

The offshore yuan fell to around 7.18 per dollar on Wednesday, as investors reacted to the latest inflation data from China. Annual consumer prices rose 0.1% in June 2025, ending a three-month streak of 0.1% declines and beating market expectations of flat growth. Although consumer inflation modestly rebounded, the increase was minimal amid property sector stress and renewed tariffs from US President Donald Trump. Meanwhile, annual producer prices dropped 3.6%—worse than the anticipated 3.2% decline and steeper than May’s 3.3% fall. This marked the 33rd consecutive month of producer deflation and the sharpest drop since July 2023. The persistent decline in producer prices highlights mounting economic pressures as China struggles with weak domestic demand and uncertainty stemming from escalating global trade tensions. Externally, the yuan also came under pressure from a strengthening greenback amid intensified trade concerns following recent moves by the Trump administration.

Offshore Yuan Falls Amid Inflation Data

The Japanese yen slipped past 147 per dollar on Wednesday, marking its third consecutive session of losses as trade negotiations between the US and Japan showed signs of strain, particularly over Japan’s rice market protections. The decline followed US President Donald Trump’s announcement of a 25% tariff on Japanese goods, set to take effect on August 1. Trump emphasized that there would be no revisions or delays to the newly imposed tariffs, which target 14 countries in total. Japanese Prime Minister Shigeru Ishiba called the latest measures “truly regrettable,” but affirmed Japan’s commitment to continue talks with Washington in search of a mutually beneficial resolution. Meanwhile, Bank of Japan board member Junko Koeda noted the central bank is closely watching for potential second-round effects on core inflation, particularly from rising food prices including rice.

Japanese Yen Weakens as Tariff Tensions Deepen

The New Zealand dollar fell to around $0.598 on Wednesday, hovering near a two-week low, after the Reserve Bank of New Zealand paused its interest rate cutting cycle but signaled that further easing is likely if price pressures abate. The central bank held its official cash rate steady at 3.25% as widely expected, following six consecutive cuts since August 2024—when it implemented its first rate reduction since March 2020. The central bank has taken a more cautious stance amid lingering concerns about domestic inflation, which currently at 2.5%, and rising risks that global trade tensions could add to inflationary pressures. But at the same time, policymakers said they expect to continue lowering rates in line with the May forecasts, assuming medium-term inflation continues to ease. Markets also anticipate ongoing economic weakness will give the RBNZ room to deliver at least one more rate cut later this year.

New Zealand Dollar Falls After RBNZ Rate Decision

The South Korean won depreciated to around 1,373 per dollar on Wednesday, pulling back from the previous session’s gains as the dollar regained momentum following the latest trade measures. Investor sentiment wavered amid reports that new tariffs on pharmaceuticals and semiconductors are under consideration, adding to concerns over existing sectoral tariffs of up to 50% on steel and aluminum, and 25% on automobiles. Adding to trade-related anxieties, US President Trump announced a 50% tariff on copper imports, set to take effect by August 1, and is expected to impact the electronics and construction industries. Meanwhile, South Korean officials pledged to intensify negotiations with the Trump administration in a bid to swiftly resolve trade tensions.

Korean Won Declines as Tariff Risks Rise

The Australian dollar held its recent gains to around $0.653 on Wednesday, supported by the Reserve Bank of Australia’s surprise decision to maintain interest rates at 3.85% on Tuesday. The decision came as most board members opted to wait for clearer evidence of slowing inflation. RBA Governor Michele Bullock stated at a post-meeting conference that persistent inflation risks remain, driven by high labor costs and weak productivity, which may push inflation above current forecasts. RBA Deputy Governor Hauser added that the central bank is closely watching US tariff developments, citing high global uncertainty. In the latest trade development, Trump ruled out further extensions to tariffs set for August 1 and announced sweeping new penalties, including a 50% tariff on copper imports, potential 200% duties on pharmaceuticals, and a 10% levy on goods from BRICS nations. Elsewhere, mixed inflation data in China, Australia’s top trading partner, also limited sharp movements for the Aussie.

Australian Dollar Holds Ground

The US dollar index held steady above 97.5 on Wednesday, maintaining recent gains as investors weighed the latest tariff actions announced by President Donald Trump. The president confirmed that the newly imposed duties on 14 countries, set to take effect on August 1, would proceed without revisions or delays. Trump also unveiled a 50% tariff on copper imports and hinted at further sector-specific levies. In a more aggressive move, he threatened tariffs of up to 200% on pharmaceutical imports, though implementation would be delayed by 12 to 18 months to give the industry time to adjust. The dollar posted its strongest gains against the yen, amid growing pressure on Japan to secure a trade agreement with Washington. Market participants now turn their attention to the upcoming release of the FOMC minutes for further insights into the Federal Reserve's policy outlook.

Dollar Holds Gains as Investors Weigh Tariff Moves

The British pound fell below $1.36, hitting a two-week low, pressured by a stronger US dollar and concerns over the country’s fiscal outlook. US President Donald Trump warned 14 nations, including Japan and South Korea, of 25% tariffs effective August 1. So far, only the UK and Vietnam have reached deals to avoid the new levies, which are separate from existing tariffs on autos, steel, and aluminium. The UK is rushing to finalize a deal with the US to eliminate tariffs on British steel, with fears the levy could jump to 50%, threatening an already fragile domestic steel industry. At the same time, concerns over the UK’s fiscal health weighed on sentiment. The Office for Budget Responsibility (OBR) warned that public debt could exceed 270% of GDP by the early 2070s, citing pressures from an ageing population and rising healthcare and pension costs. Growing global tensions and calls for increased defence spending are also adding to the long-term fiscal uncertainty.

Sterling Falls to 2-Week Low

The dollar index rose to 97.7 on Tuesday, extending its rebound since touching the over-three-year low of 96.8 touched on July 2nd as markets assessed how the fresh wave of tariffs mandated by President Trump will impact capital flows and the outlook for fiscal and monetary policy. Trump placed aggressive tariffs on key Asian trading partners, including 25% levies on Japan and Korea in addition to sector specific tariffs on autos and metals that have a high impact on both economies, to be enforced on August 1st. The President also signaled that additional levies may be passed against countries that reciprocate to tariffs or mandate "anti-American policies of BRICS". The dollar gained the most against the yen due to lower foreign exchange demand in Japan following the tariffs. Last week, bets of a rate cut by the Fed this month were nearly erased following a strong jobs report.

Dollar Index Extends Rebound

The South African rand rose slightly toward 17.8 per USD, up from an over one-week low of 17.9 hit on July 7, lifted by hopes of a potential US trade deal after President Trump delayed new tariffs until August 1. He told President Ramaphosa that a 30% tariff would be imposed on all South African goods, but said the US remains open to cooperation if trade becomes more balanced. The announcement came hours after the US leader threatened to impose an additional 10% levy on all countries that form part of the BRICS economic bloc. The US is its second-biggest trading partner after China, and South Africa's automobile and farming sectors had duty-free access to the US market. South Africa is reportedly seeking to cap the tariff at 10% and is calling for key sectors—vehicles, farm products, auto parts, steel, and aluminum—to be excluded from the hikes.

South African Rand Firms

The Indian rupee strengthened past 85.7 in July, holding most of the rally from late June as the relative softness in energy prices and bullish momentum for the Indian economy outweighed the uncertain outlook for trade. Continued flows of tankers through the Persian Gulf into the Indian Ocean and another output increase by OPEC+ nations limited concerns of a sharp rebound in oil and fuel imports for India, preventing capital outflows as energy is India's largest import. In the meantime, strong indicators for the Indian economy maintained bets of strong growth domestically, with June's PMI coming at 61. This allowed the Indian rupee to hold its strength with the RBI still being able to build foreign exchange reserves, with the latest reading surpassing $700 billion, the highest om 10 months. On the other hand, uncertainty remained on tariffs by the US. The US refrained from imposing fresh tariffs in its latest letter round, but made levy threats against BRICS members.

Indian Rupee Holds Rally

The euro rose slightly above $1.175, nearing its highest level since August 2021, as trade tensions eased after news that the US had proposed a deal to the EU maintaining a 10% baseline tariff, with exemptions for sensitive sectors such as aircraft and spirits. The EU is aiming to finalize a preliminary agreement with the US this week to lock in the 10% rate beyond the August 1 deadline while negotiations continue toward a permanent deal. Investor sentiment also improved after President Donald Trump spared the EU from additional tariffs ahead of the initial July 9 deadline. Meanwhile, the EU announced it was preparing retaliatory tariffs on a range of US products in response to US metal duties. Officials warned that if an agreement isn’t reached, further actions—such as export controls and restrictions on US access to public contracts—could be implemented. On the monetary policy front, markets are now pricing in just one more rate cut from the European Central Bank this year.

Euro Nears 2021 High Amid Progress on US-EU Trade Deal

USDRUB decreased to 76.76, the lowest since May 2023. Over the past 4 weeks, US Dollar Russian Ruble lost 1.37%, and in the last 12 months, it decreased 9.92%.

Russian Ruble Hits 25-month High

The Japanese yen weakened past 146 per dollar on Tuesday, hitting a two-week low after US President Donald Trump announced a 25% tariff on Japanese goods, set to take effect on August 1. While lower than the earlier threat of a 35% levy, the new rate remains significantly higher than the baseline 10% tariff imposed on most countries, adding pressure on Tokyo to reach a trade deal with Washington. Japanese Prime Minister Shigeru Ishiba said Japan will continue negotiations with the US in pursuit of a mutually beneficial agreement. On the domestic front, Japan's current account surplus for May exceeded expectations, offering some support to sentiment. However, earlier data showing weaker-than-expected wage growth has dampened expectations for further interest rate hikes by the Bank of Japan, putting downward pressure on the yen.

Japanese Yen Falls as Trump Imposes 25% Tariff

The offshore yuan stabilized to around 7.17 per dollar on Tuesday, supported by a retreat in the US dollar after President Trump announced an updated round of tariffs targeting fourteen countries that have yet to finalize trade deals with Washington. The measures include a 25% levy on major exporters such as Japan and South Korea. Additionally, Trump signed an executive order delaying the start of reciprocal tariffs from July 9 to August 1. Meanwhile, sentiment toward the yuan was underpinned by reports that China is considering doubling the quota for the southbound leg of the Bond Connect scheme, a move that would expand domestic investors’ access to overseas bonds and support efforts to internationalize the currency. Also helping to steady the yuan, the People’s Bank of China set the daily reference rate at 7.1534 per dollar, slightly weaker than the previous fix but stronger than expected. Markets now await June CPI, which is expected to remain soft, along with PPI and trade data.

Offshore Yuan Stabilizes

The South Korean won rose to around 1,368 per dollar on Tuesday, rebounding from the previous session’s losses as investor uncertainty eased following the announcement of US trade measures, which ended weeks of ambiguous signaling with clearer policy direction. On July 7, US President Donald Trump further clarified the scope of the measures in letters addressed to Japan and South Korea, stating that a 25% tariff would be imposed on both countries. Investor sentiment improved following the extension of the tariff implementation deadline, amid hopes that the additional time may allow for constructive trade negotiations between the two nations. The newly announced tariffs are set to take effect on August 1 but will not be cumulative with previously imposed sector-specific duties, including those on automobiles, steel, and aluminum. Market participants are now closely watching for Seoul’s official response and any potential adjustments to trade or fiscal policy that may follow.

South Korean Won Rises on Eased Trade Uncertainty

The New Zealand dollar stabilized around $0.60 on Tuesday after four straight declines, as investors weighed trade-related risks to the export-driven currency. President Donald Trump issued the first of several planned tariff warning letters, with rates ranging from 25% to 40%, but signaled flexibility, calling the August 1 deadline “not 100% firm” and leaving room for further negotiations. On the domestic front, attention now turns to the interest rate decision on Wednesday, where the Reserve Bank is expected to keep rates steady, pausing for the first time after aggressively cutting rates since last August. The central bank had lowered the official cash rates by 225 bps from 5.5% to 3.25%, including three 50 bps cuts. Markets are currently anticipating at least one more 25 bps cut later this year due to downside risks to growth from the economic impact of US tariffs.

New Zealand Dollar Stabilizes

The US dollar index slipped below 97.5 on Tuesday, retreating from the previous session's gains after President Donald Trump announced updated tariff rates on 14 countries that have yet to secure trade deals with Washington. The list includes major exporters such as Japan and South Korea, both of which will face 25% levies. Trump also signed an executive order extending the reciprocal tariff deadline to August 1 from July 9, giving negotiators more time to reach agreements. In addition, he warned of an extra 10% tariff on countries aligning with what he described as the “Anti-American policies of BRICS,” as the bloc convened for a summit in Brazil. Despite Tuesday’s pullback, the dollar had strengthened on Monday amid easing trade concerns and reduced expectations for near-term interest rate cuts by the Federal Reserve. A stronger-than-expected US jobs report for June lessened the urgency for policy easing, with markets largely pricing out the likelihood of a rate cut in July.

Dollar Eases as Trump Announces New Tariffs

The Australian dollar rose to around $0.651 on Tuesday, rebounding from sharp losses in the previous session, supported by a weakening greenback. The US dollar came under pressure after President Donald Trump announced a new round of tariffs targeting fourteen countries that have yet to finalize trade agreements with Washington. The measures include a 25% tariff on key exporters such as Japan and South Korea. Moreover, Trump signed an executive order delaying the start of reciprocal tariffs from July 9 to August 1, further clouding the global trade outlook. In Australia, investors are now focused on the upcoming monetary policy decision, expected later today. Markets widely anticipate a 25 bps rate cut, bringing the cash rate down to 3.60% and marking the RBA’s third rate reduction this year. Investors will also be watching closely for the release of NAB’s June index on business confidence and conditions later today.

Australian Dollar Gains on Greenback Weakness

The US dollar index found renewed footing above the 97.5 mark on Monday as markets grappled with an escalating tariff offensive that President Trump confirmed would begin on August?1st. In a pair of Truth Social posts, he announced 25% duties on all Japanese and South Korean imports, adding to the broader reciprocal–tariff campaign that spares only those nations which have struck preliminary deals, and warned of an extra 10% levy on any country aligning with “anti-American” BRICS policies. Treasury Secretary Scott Bessent signaled that letters outlining tariff rates would continue to arrive in the coming days, heightening the sense of urgency for trading partners scrambling to negotiate exemptions. Meanwhile, upbeat US labor data, 147,000 payrolls in June versus 110,000 expected and a fall in unemployment, tempered fears of an imminent Fed rate cut.

DXY Extends Rebound

The Mexican peso slipped past 18.67 per USD after rallying to an August-2024 high of 18.63 on July?4th, as the US dollar strengthened following President Trump’s confirmation that reciprocal tariffs will take effect on August?1st. Nevertheless, Mexico’s external position remains robust as the cumulative January–May trade surplus expanded to over?$9?billion, including a $1.03?billion surplus in May alone, and June remittances climbed to a record $5.7?billion, shoring up foreign-exchange reserves. On the policy front, Banco de México’s June?26th decision to cut its benchmark rate by 50?basis points to 8%, while insisting further reductions hinge on clear disinflation, has preserved a generous real yield advantage that underpins peso demand. At home, labor markets and business activity continue to outperform regional peers as unemployment stands at a low 2.7%, and although June’s PMI eased to 46.3, it remains stronger than most in Latin America.

Mexican Peso Eases from August Highs

The Brazilian real slid past 5.47 per USD, giving back gains from its nine-month peak of 5.41 on July 3rd, as the US dollar has rallied on news that President Trump has pushed his reciprocal-tariff deadline out to August 1st, and threatened additional duties on BRICS-aligned nations, luring yield-seeking capital back to developed markets. At the same time, softening prices for Brazil’s cornerstone exports, crude oil and iron ore, have eroded hard-currency inflows, while a surprise widening of June’s trade deficit and an unexpected contraction in industrial production undermined earlier signs of a nascent recovery. However, the central bank’s 15% interest rate, maintained to rein in inflation now running above target, leaves scant room for further cuts and solidifies Brazil’s interest-rate edge, limiting downward pressure on the real.

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