Market News
Dollar dented by economic worries; euro remains in favor - REUTERS
By Saqib Iqbal Ahmed
Summary
- Concerns rise about economic impact of Trump's tariffs
- US retail sales rebound moderately in February
- Euro near 5-month high after Germany agrees fiscal deal
- Yuan firm as Beijing takes steps to bolster consumption
NEW YORK, March 17 (Reuters) - The dollar hovered near a five-month low against the euro on Monday as worries about the economic fallout from U.S. President Donald Trump's protectionist trade policies kept investors cautious on the dollar.
The euro , which has advanced in recent sessions, lifted by hopes of a German fiscal deal, was 0.4% higher at $1.092325. The common currency was just shy of $1.0947 it hit last week, its highest since October 11.
Currency markets have undergone a shift in recent months as traders re-evaluate their initial expectations that Trump's economic policies would both support the dollar and cause other currencies to weaken.
The reassessment has prompted the dollar to retreat 6% against the euro since mid-January.
"I think the market just called it wrong," said Kyle Chapman, FX markets analyst at Ballinger Group, in London.
"They were leading on the tax cuts and deregulation to boost growth, while at the same time creating a sort of risk-averse mood," he said.
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"Actually the focus has been much more on the protectionism, sending people's heads spinning," Chapman said.
Since taking office in January, Trump's declarations on imposing and then suspending tariffs against a wide range of trading partners have unnerved markets.
While ruling out the possibility of a financial crisis, Treasury Secretary Scott Bessent, in an interview aired on Sunday, said there were "no guarantees" there will not be a recession in the United States.
The dollar found little support from a Commerce Department report on Monday that showed retail sales rebounded moderately in February, after a revised 1.2% decline in January.
