QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008.
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- “We will continue to maintain our countermeasures and increase them on April 2nd,” Finance Minister Dominic LeBlanc said Wednesday.
- A likely 25 basis point cut in December may be followed by a more data-dependent approach in 2025, potentially supporting continued dollar strength.
- It less on inflation or devaluation, which is measured in alternative metrics like the Big Mac Index.
- Yet Chinese steel does make its way into the United States secondhand.
Our list features brokers with competitive spreads, fast execution, and Forex harmonics powerful platforms. Whether you’re a beginner or an expert, find the right partner to navigate the dynamic Forex market. The widget shows the Last Price of the commodity you are viewing, compared to the average last price of the same commodity for the past 18 months.
Bond Markets
The U.S. Dollar Index is a measure of the value of the United States dollar relative to a basket of six foreign currencies. The Index goes up when the U.S. dollar is stronger compared to other currencies. The Government of Canada is making a strong border even stronger, and because of our work, the U.S. Customs and Border Protection has reported a significant decrease in fentanyl seizures from Canada, with a 97 per cent drop in January 2025 compared to December 2024. Trump backed off his threat to double the steel and aluminum tariff rates for Canada after Ontario Premier Doug Ford agreed to pause surcharges on electricity for US customers. The US was the second-biggest destination for the EU’s iron and steel exports last year, according to official figures released Wednesday.
From cars to appliances, steel and aluminum are critical inputs
Canada will not stand by as the United States imposes unwarranted and unreasonable tariffs on Canadian goods. Ford and US Commerce Secretary Howard Lutnick announced they’d meet Thursday, along with Canadian Finance Minister Dominic LeBlanc, to renegotiate the free trade treaty known as the USMCA. America imports very little steel directly from China, by far the world’s largest producer of steel. Steel tariffs of 25% launched in Trump’s first administration and continued by former President Joe Biden resulted in American importers shifting to other sources. Canada’s Algoma Steel (ASTL) said it’s temporarily suspending all shipments to the US in response to the tariffs.
Safe-haven status amid global uncertainties
The pause will be in place until the company has a better understanding of where tariffs stand given the heightened volatility lately, which was on full display on Tuesday, Michael Garcia said Wednesday in an interview on CNBC. “Our hope is that we can quickly find a way to get to a situation where both economies can prosper and we don’t have this sort of back and forth in terms of tariffs. It’s not in the interest of Canadian or American consumers,” LeBlanc said. Though Alcoa is headquartered in Pittsburgh, a significant share of its aluminum production is located in Canada, where it’s much cheaper to produce because of energy efficiencies there, and then shipped to the US for processing, Oplinger said. That’s in part why the company believes the tariffs, particularly on Canadian aluminum, would force US-based aluminum companies to layoff workers.
China is the only country whose aluminum and steel will be tariffed at rates higher than 25%. The index focuses on trade and the strength of the U.S. dollar against specific currencies. It less on inflation or devaluation, which is measured in alternative metrics like the Big Mac Index.
White House: Stock market numbers ‘a snapshot of the moment in time’
Likewise, if the DXY shows an oversold level, traders may consider selling these markets. DXY Index is affected by recessions and economic growth, inflation and deflation, interest rate differentials, trade movements, among others. Read our USD Market Update for an analysis of forecasts from banks and FX experts as well as news and recent movements of USD in the currency markets. At the end of 2019, the DXY traded at 96.5, meaning that the US dollar has slightly depreciated versus the basket of currencies since its establishment in 1973. All options remain on the table as the government considers additional measures, including non-tariff options, should the U.S. continue to apply unjustified tariffs on Canada. Tariffs on both metals could significantly raise prices for Americans.
The index’s value is indicative of the dollar’s value in global markets. While Trump’s aim is to hurt the Canadian economy by imposing higher steel and aluminum tariffs on them, the move risks hurting the American economy as well. While the forex market continues to price in a December rate cut, Fed Chair Jerome Powell’s recent less dovish rhetoric, suggesting the economy shows no urgency for lower rates, may well support further dollar strength into early 2025. Businesses with international operations rely on the index to manage risks from exchange rate fluctuations. By monitoring DXY movements, a company importing raw materials like timber or iron ore can prepare for potential cost increases if the dollar strengthens against other currencies.
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- Regardless, Trump’s assertion that Canada kept hiking its dairy tariffs when Biden was in charge is just not true.
It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. The Barchart Technical Opinion widget shows you today’s overall Barchart Opinion with general information on how to interpret the short and longer term signals. Unique to Barchart.com, Opinions analyzes a stock or commodity using 13 popular analytics in short-, medium- and long-term periods. Results are interpreted as buy, sell or hold signals, each with numeric ratings and summarized with an overall percentage buy or sell rating. After each calculation the program assigns a Buy, Sell, or Hold value with the study, depending on where the price lies in reference to the common interpretation of the study.
So, while Trump said his “substantially” higher auto tariffs will “shut down” the auto industry in Canada, they are more likely to backfire on US auto production, given how intertwined the North American car supply chain is. With aluminum, other top foreign sources shipping to the US include China, Mexico and the United Arab Emirates. With steel, Brazil, Mexico and South Korea are top sources, according to US trade data from last year. The tariffs on steel and aluminum mark the first time in Trump’s second term that a set of tariffs has been applied to all countries. Layoffs are ticking higher and inflation reaccelerated last month, with consumer prices rising at their fastest pace since August 2023.
“It may go up higher,” Trump said Tuesday of the 25% tariffs on all countries’ steel and aluminum sent to the US at an event hosted by the Business Roundtable. “The higher it goes, the more likely it is they’re going to build,” he said, referring to more companies moving their production to the US. Hours before enacting the latest tariffs, Trump reversed a threat to double the rate on steel and aluminum from Canada, the US’s top source of imports for the metals. Instead, steel and aluminum from there will be subject to the 25% levy. Import activity has accelerated and the trade deficit has grown in recent months as businesses and consumers ramped up purchases in advance of potential tariffs levied by the Trump administration. This information has been prepared by IG, a trading name of IG Markets Limited.
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Trump has said the tariffs on Canada and Mexico are a result of the countries’ policies around undocumented immigration and drug trafficking. Last last week he said he was delaying the bulk of his most severe tariff threats. The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes.
After hitting a record high above $3,050 early Thursday, Gold retraced to the $3,030 region amid the stronger Dollar and diminishing US yields, all amid investors’ repricing of the latest FOMC event. If the DXY is oversold, currency pairings xm group review with the US dollar as the base currency, for example, USD/CHF, may be a good purchase. Likewise, if the DXY is overbought, selling these markets makes sense.
The dollar index’s value is calculated as a weighted geometric mean of these currencies’ exchange rates. When the dollar index rises, it indicates a strengthening dollar; when it falls, it signifies a weakening dollar. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation.
This widget shows the latest week’s Commitment of Traders open interest. The COT data, as reported by the US Commodity Futures Trading Commission (CFTC), is from Tuesday, and is released Friday by the CFTC. Reporting firms send Tuesday open interest data on Wednesday morning. The CFTC then corrects and verifies the data for release by Friday afternoon.