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The US dollar index experienced a significant drop today, tumbling by 0.8%, marking its steepest decline since August. This index evaluates the US dollar’s performance against six prominent currencies, including the euro.
This downturn in the dollar contributed to a surge in the Australian dollar, which climbed to its highest level in 15 months, advancing by 0.3% to reach 67.66 US cents. The Australian dollar last reached this threshold in October 2024.
The euro also gained ground against the US dollar, appreciating by 0.65% today.
In contrast, the Australian Stock Exchange (ASX) 200 index faced a downturn, slipping by 0.5% to 8,775 points by midday.
The euro was also up 0.65 per cent against the US dollar today.
Meanwhile, the Australian Stock Exchange (ASX) 200 index dropped 0.5 per cent to 8775 points by lunchtime today.
World stock markets had been bracing for more volatility amid Trump’s latest tariff face-off in Europe.
The president threatened eight European countries with tariffs if they opposed his plans to seize Greenland.
Trump also threatened to place a 200 per cent tariff on champagne after French President Emmanuel Macron declined his invitation to join his international organisation “Board of Peace”.
Investors are rattled by fears the trade turbulence which kicked off last year â dubbed “Sell America” â could return to Wall Street.
It appears many are hedging bets that Trump’s NATO appearance in Davos, Switzerland, could result in another wave of tariffs if Denmark does not cede Greenland.
The currency’s renewed strength followed Trump’s announcement of a 90-day pause on tariffs into the US on most countries.
Trump told reporters at the time that he pulled back on many global tariffs â but not on China â because people were “yippy” and “afraid” due to the stock market declines.
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