The dollar index (DXY00) today is down sharply by -2.19% at a 6-month low. The dollar is plummeting today because of concerns that President Trump's sweeping new reciprocal tariffs will start a trade war that will derail the economy and force the Fed to cut interest rates. Also, today's plunge on the 10-year T-note yield to a 5-1/2 month low has weakened the dollar's interest rate differentials. In addition, the dollar may face a confidence crisis if President Trump's tariffs prompt investors to dump US assets. The dollar extended its losses today after the US Mar ISM services index fell more than expected to a 9-month low.
US weekly initial unemployment claims unexpectedly fell -6,000 to a 7-week low of 219,000, showing a stronger labor market than expectations of an increase to 225,000. However, continuing claims rose +56,000 to a 3-1/3 year high of 1.903 million, above expectations of 1.870 million, showing it has become more difficult for out-of-work people to reenter the workforce.
