** Economic News** Usd Exchange Rate Trends In The Coming Time: Political And Financial Dynamics Are Reshaping The Global Currency Market

In the context of the global economy facing strong fluctuations, the USD exchange rate is being greatly influenced by political and financial factors. Below is an in-depth analysis based on recent data, helping readers better understand this trend.

* Escalating trade war: Is the USD still a "safe haven"?

Trade tensions between the US and China are escalating with the imposition of tariffs on imported goods. The goal is to protect domestic production, but the consequences are clearly reflected in the currency market.

• The DXY index (a measure of the USD's strength against a basket of major currencies) has fallen nearly 9% since the start of 2025, marking a significant decline for the currency once considered a safe haven.

• US stocks have been in turmoil, with the S&P 500 down more than 12% and the Nasdaq plunging nearly 18%.

• Gold prices have surged, surpassing $3,500/ounce, indicating that investors are shifting to safer assets. The USD may no longer be the ideal haven! 

* China and other major countries are dumping US government bonds

Many countries are "withdrawing" from US bonds, shaking confidence in the greenback. Specifically:

• China reduced its holdings to $759 billion, with a decrease of $9.6 billion in December 2024.

• Japan net sold 27.3 billion USD, holding only 1,059.8 billion USD.

• The UK sharply reduced 44.1 billion USD, down to 722.7 billion USD. This is pushing up US bond yields, increasing borrowing costs for the US government and further weakening the USD's position globally.

* President Trump's "intentionally weak USD" strategy

The weakening of the USD is not just a coincidence! Many economists believe that Mr. Trump is deliberately weakening the USD to boost exports and improve the trade balance by taking the following actions:

• Imposing tariffs on imports from China and other countries.

• Renegotiating trade agreements, such as pressuring Europe and Mexico to reduce tariffs.

• Leaving open the signal that the USD is not as strong as before.

However, economists warn that if not well controlled, this policy could lead to inflation, reduce the real value of the USD and promote the de-dollarization process in the international financial system.

Summary: The USD exchange rate is under pressure from trade, financial and geopolitical factors. Its future will depend on the Fed's policy and the response of major economies. Investors and businesses need to closely monitor these fluctuations to promptly adjust their financial and investment strategies, to minimize risks in a rapidly changing context.

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