Dollar Drop Gains Momentum And U.S. Rates Extend Decline

2025-07-01 07:20:00 ET

Overview

An accelerated run on the US dollar continues. The euro, sterling, Australian and New Zealand dollars have risen to new highs. The greenback has dropped to new lows since 2015 against the Swiss franc. Japan's efforts to protect its rice farmers triggered the ire of President Trump. The "reciprocal tariffs," which could come back to the fore in a week, would be around 24% on Japan if no agreement is struck. While all the G10 currencies are firmer today, the yen leads with around a 0.75% gain. In addition to the trade disruption, a drag is coming from the decline in US rates. The 2- and 10-year yields are at new two-month lows. All but a few emerging market currencies are higher today, led by the 1.4% jump in the Taiwanese dollar as life insurance companies reportedly boosted hedge ratios....

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