Forex Today: US Dollar retreats to start week, focus remains on geopolitics
Here is what you need to know on Monday, March 3:
The US Dollar (USD) struggles to find demand at the beginning of the week as investors continue to assess the latest geopolitical developments. Preliminary February inflation data from the Eurozone will be featured in the economic calendar on Monday, ahead of the February ISM Manufacturing PMI report from the US.
US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.29% | -0.17% | -0.08% | -0.01% | -0.16% | -0.01% | -0.07% | |
| EUR | 0.29% | 0.00% | -0.02% | 0.11% | 0.02% | 0.09% | 0.04% | |
| GBP | 0.17% | -0.01% | 0.08% | 0.09% | 0.02% | 0.09% | 0.04% | |
| JPY | 0.08% | 0.02% | -0.08% | 0.30% | -0.02% | 0.13% | 0.02% | |
| CAD | 0.01% | -0.11% | -0.09% | -0.30% | 0.00% | -0.00% | -0.05% | |
| AUD | 0.16% | -0.02% | -0.02% | 0.02% | 0.00% | 0.07% | 0.02% | |
| NZD | 0.00% | -0.09% | -0.09% | -0.13% | 0.00% | -0.07% | -0.05% | |
| CHF | 0.07% | -0.04% | -0.04% | -0.02% | 0.05% | -0.02% | 0.05% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
US President Donald Trump's meeting with Ukrainian President Volodymyr Zelenskyy turned into an argument late Friday and Trump cancelled the signing of a minerals deal, which could have paved the way to a Russia-Ukraine ceasefire and possibly a truce deal eventually. Over the weekend, Trump reiterated that they will impose an additional 10% tariff on Chinese imports starting Tuesday, as initially planned. Early Monday, Global Times reported that China is evaluating countermeasures in response to additional US tariffs. After reaching its highest level in two weeks near 107.70 late Friday, the USD Index stays on the back foot below 107.50 on Monday.
During the Asian trading hours, the data from China showed that the Caixin Manufacturing PMI improved to 50.8 in February from 50.1 in January. AUD/USD registered losses for six consecutive trading days and lost more than 2% in the previous week. The pair holds steady above 0.6200 in the European morning on Monday.
The Harmonized Index of Consumer Prices (HICP) in the Euro area is forecast to rise 2.6% on a yearly basis in February. EUR/USD trades modestly higher on the day above 1.0400 to begin the European session on Monday after closing in negative territory for two consecutive weeks.
GBP/USD edged lower on Friday and snapped a three-week winning streak. The pair stays relatively quiet and trades at around 1.2600 on Monday.
USD/CAD gained about 1.7% in the previous week before going into a consolidation phase near 1.4450 on Monday. Trump administration's 25% tariffs on Canadian imports are expected to go into effect on March 4.
USD/JPY holds steady at around 150.50 in the European morning. In the early Asian trading hours on Tuesday, the Japanese economic calendar will feature Unemployment Rate data for January.
Gold lost more than 2.5% and closed a week in negative territory for the first time since late December. XAU/USD clings to modest recovery gains above $2,860 on Monday.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
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