Strong trader demand for safe havens due to US import tariffs led to weaker dollar

Reuters reports that such safe-havens as the Swiss franc and the yen are holding near six-month highs on Tuesday. Meanwhile, the dollar is facing broad losses due to rising market concern over a recession in the US caused by sweeping import tariffs.

Global stocks have fallen sharply since President Donald Trump’s announcement of new tariffs last week. The European Union and China soon signaled retaliation by proposing larger duties on imports from the US. Trump, in turn, threatened even higher levies. 

The greenback’s status as a safe-haven asset is eroding amid intensifying uncertainty over tariffs and concern over their impact on the growth of US GDP, Reuters says. According to the news agency, the dollar index lost 0.3% on Tuesday, and 1% since the duties were announced last week.

Investors believe that the increasing risk of an economic downturn in the US could lead the Federal Reserve to cut rates as early as May, Reuters adds.