Foreign currencies are announced in a window in Times Square, one of the best tourist attractions in New York and a nation, on March 28, 2025, in New York City.
Spencer Platt Gety pictures
CNBC strategic experts told CNBC that the display of the customs tariff system for US President Donald Trump discourages feelings towards the dollar and pushes investors to search elsewhere for their deals in foreign currencies (FX).
The dollar index, which measures the value of the green back against a basket of main competitors, has not changed on Wednesday morning. The American currency began a steady rise in late 2024, which peaked in mid-January-the dollar index has reduced some of these gains steadily in recent weeks.
The dollar is seen historically on a large scale as one of the safe assets of investors, given its status as a backup currency in the world and hegemony in International borrowing, payments and trading. When the dollar strengthens, American exports become more expensive, while imports become cheaper. The value of Greenback can be Also effect Global monetary policy, capital flows and company profits.
“The location of the Trader Currency is turning into a decline on the dollar and becomes more up to the currency of the main commercial partners in the United States, where the United States is preparing to launch a multinational trade war,” Joseph Prussuelaas, the chief economist in RSM US. Publish Monday.
The euro is expected to rise
Prussuelaas referred to deals in euro As a reference to “erosion of confidence in the dollar.”
He said in the Monday note, “From late October to the first week of March, the majority of the location of the euro is long in dollars,” he said in the Monday note. “But for three weeks now, the long -standing euros -euros.”
Jordan Rochester, head of FCCC and CEO of ARM’s Mizuho Bank, told CNBC that he carries a “bottom offered” on the euro against the dollar. He believes that the euro decreases somewhere between $ 1.06 and $ 1.07 before climbing to $ 1.12 or higher by the end of the year.
“I expect this market to be in the” maximum pain “as soon as we know the details of the definitions,” he said, on the pretext that this provided “an opportunity to take the other side.”
Definitions [are] It is unlikely to worsen once in and [the] European Union and others [are likely] To respond to … their revenge definitions that will lead to healing later. ”
Athanasios Vamvakidis, the global president and administrative director of the G10 FX strategy at Bank of America, told CNBC that he had seen aside forward against the dollar, although the definitions would have a positive positive impact on Greenback.
He said in one of the calls, “With regard to the dollar in which we were and we are still developing the year as a whole,” he said in one of the calls. “We believe that the market is already highlighting a selective tariff, but it will get a tariff in all fields.”
He told CNBC that the dollar can gather this week in the wake of the direct definitions that enter into force, but he indicated that “this is probably an opportunity for sale.”
“After the very short term, there are two channels that must lead to the weakness of the dollar,” explained by Vagfaxadis. “First, when you have the United States against the rest of the world in the trade war scenario, the United States will eventually suffer more because … when you compare it with the rest of the world, the rest of the world is greater. Second, the customs tariff indicates the risks of stagnation – and now, the market is very concerned about such risks.”
Like Brussuelass and Rothsters, he expected that Euro will eventually be strengthened through Trump’s trade war. While the United States focuses with a combination of policy, it is likely to be negative on its currency, Europe focuses on “friendly growth policies.”
“Germany announced a huge financial incentive,” he said. “So far these plans, but we have not even been [have] Such plans before, coming from Germany, the economy with the weakest growth in the eurozone, the largest economy in the eurozone and the most financial policy in the eurozone, this is in fact a changing games. “
Vamavakide said his team believes that the euro is $ 1.15 this year and $ 1.20 in 2026.
Sterling bulls
The Bank of America has argued British pound He has the ability to rise with the start of the Trump tariff system, noting that the American president has targeted the threats of customs tariffs on the European Union while hinting that Britain could spare.
“There is also a positive season for the pound in April,” he said. “So in the short term, we must see the pound sterling relatively well. For the year as a whole, we also love sterling against the dollar. Against the euro depends on the implementation of European Union reforms.”
At a note at the end of March, Maybank analysts reviewed their expectations up to obtain the British pound, saying that they now see the pound sterling up to $ 1.26 by the end of the year before it rose to $ 1.31 in early 2026. On Wednesday morning, the British currency was trading at about $ 1.29 against the US dollar.
And they said: “We … are more upward on GBP with its plans to increase defense spending, maintain financial discipline and reduce risks in stagnation.” “We believe in our belief that GBP will be more flexible on the basis that the UK as a economy directed towards services is less likely to be affected by Trump’s commercial policies. As a close ally of the United States, it is also possible to save from important measures by the Trump administration. This is despite an external environment that is still very uncertain.”
Australia, New Zealand currencies can be strengthened
Maybank analysts also expected climbing to New Zealand dollarGive the currency a $ 0.58 target against Greenback by the end of 2024 – by 2.1 % of the current levels.
“The bottom of NZDUSD, which warns of more recovery,” said, adding that the expectations of the currency have been positive with the consultation of New Zealand’s economy, and it is possible that the pace of cash dilution will slow down.
“both of them Australia New Zealand also has stronger public budgets than most other western countries – especially debts that are much lower to GDP ratios, “Alex King, a former FX trader and founder of the Personal Finance Platform Money generationHe said via email.
“This means that they have a much more space for their potential stimulus measures [it’s] Another factor makes them attractive places for investors, which helps to enhance their currencies. “
He added that the economies of both countries were “less related to the list of trade war.”
“To combat the impact of definitions, China is looking for stimulus to enhance its own economy, and this is a positive for the economies of Australia and New Zealand, both of which tend to manage trade surpluses with China,” King told CNBC.