The US dollar plummeted by nearly 100 points, and Trump rarely accused China and Japan at the same time!

On Tuesday, the US dollar index suffered a sell-off, and investors were worried about the impact of tariffs on U.S. economic growth, so the US dollar weakened against most currencies.

The dollar index (DXY), which tracks the dollar against six major currencies, closed down 96 points on Tuesday, or 0.9%, to 105.58.

Sarah Ying, head of foreign exchange strategy at CIBC Capital Markets, said: "The market is considering the negative impact of tariff uncertainty on the U.S. economy, and the traditional safe-haven buying of the U.S. dollar is also questioned. We are in a theme shift: the market is shifting from a systematic bullish dollar to a bearish dollar." Kathleen Brooks, head of research at XTB, said: "The asset price increase driven by Trump trading is receding sharply between October and January, and there is a clear link between the decline in U.S. Treasury yields and the weakening of the U.S. dollar."

The Trump administration began imposing 25% tariffs on Canadian and Mexican goods on Tuesday and raised tariffs on Chinese goods to 20%.

In response, China announced that it will impose an additional 10% to 15% tariffs on some U.S. imported goods starting from March 10. The Canadian government also said it would impose retaliatory tariffs on U.S. goods on Tuesday, while Mexico is expected to follow up.

Euro/USD climbed to a three-month high as German conservatives and Social Democrats announced a proposal to establish a 500 billion euro infrastructure fund and amend borrowing rules to increase defense spending.

Affected by German news, other European currencies have also risen or continue their uptrend, including the Swiss franc, the British pound, the Norwegian krone and SwedenKron.

Friedrich Merz, the leader of the German CDU/CSU and is likely to become the next German Chancellor, said the alliance will submit a constitutional amendment motion to the German parliament next week, proposing to remove defense spending of more than 1% of GDP from Germany's "debt brake" rules.

Berenberg chief economist Holger Schmieding said: "Sends a clear signal that Germany attaches importance to defense issues and conveys Germany's determination to seriously invest in infrastructure to Ukraine and the country. This will strengthen Europe's overall strength and support the euro's strength."

Asian Market

RBA Deputy Governor Andrew Hauser emphasized in a speech today that monetary policy aims to ensure inflation returns to the midpoint of the target range, which is crucial to maintaining long-term price stability.

He defended the rate cut in February, saying it "reduces the risk of inflation below that middle value."

However, Hauser refuted the market's expectations for a continued easing cycle, saying that "the board of directors currently disagrees with the market's confidence in the need of further interest rate cuts."

While Hauser acknowledged that interest rates will go where they need to go to balance inflation control and full employment, he made it clear that progress so far does not mean aihuaforex.complacency.

He stressed that the RBA will continue to evaluate economic development on the basis of "sequences".

Australia's GDP grew by 0.6% in the fourth quarter, surpassing the expected 0.5%, while an annual growth rate of 1.3%. A key highlight is that per capita GDP grew by 0.1% month-on-month, the first increase after seven consecutive quarters of contraction.

Katherine Keaihuaforex.comenan) said, "The economy generally saw moderate growth throughout the quarter. She noted that both public and private spending made positive contributions, and exports of goods and services increased.

European market

European unemployment rate remained unchanged at 6.2% in January, better than expected by 6.3%. Across the EU, unemployment, unemployment, was the best of the expected 6.3%. The rate also stabilized at 5.8%. According to the European Statistics Office, the number of unemployed people in the EU is 12.824 million, of which 10.655 million are in the euro zone.

The unemployment rate in the euro zone has dropped by -42k, while the overall unemployment rate in the EU has dropped by -8k.

U.S. market

New York Fed Chairman John Williams admitted that tariffs could lead to inflationary pressures later this year, noting that the prices of consumer goods couldWill rise immediately, while other industries may be affected more slowly.

However, he stressed the high uncertainty surrounding trade policy, saying: "We don't know how long tariffs will apply. We don't know how other countries will respond.

In addition to tariffs, Williams noted that the Trump administration's fiscal and regulatory policies will also play a key role in shaping economic outlook and monetary policy decisions.

Williams also reiterated that the current policy stance is still appropriate. "I think the current policy stance is good." I don't think it's necessary to change it immediately," he pointed out.

Although admitting that interest rates may be cut later this year, he did not make a promise, adding that "it's really hard to know" whether further easing is needed.

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