- Dollar nears four-month low against major currencies.
- Investors seek safe havens in yen and Swiss franc.
- US tariffs and economic slowdown fears impact markets.
- Stock futures and Treasury yields decline.
- Analysts predict further pressure on the dollar.
The US dollar weakened on Monday (10 March) nearing its lowest level in four months. Concerns over trade tensions and a slowing economy led investors to move towards safer assets. The yen and Swiss franc saw gains as uncertainty persisted.
The dollar index, which tracks the currency against six major rivals, stood at 103.83, close to last week’s four-month low. The greenback’s decline follows a 3% drop last week, marking its worst weekly performance since November 2022.
Market concerns intensified after US President Donald Trump imposed tariffs on key trading partners. While some tariffs were delayed for a month, fears of economic strain persisted. Investors responded by cutting net long dollar positions from a peak of $35.2 billion in January to $15.3 billion.
“FX investors are in a broad de-risking mode,” said Parisha Saimbi, Asia-Pacific rates and FX strategist at BNP Paribas in Singapore. Lower confidence in the U.S. economy is shifting investor focus to alternative assets.
Safe-Haven Currencies Gain Strength
The Japanese yen strengthened by 0.25%, trading at 147.68 per dollar. On Friday, it had touched a five-month high of 146.94. Similarly, the Swiss franc rose to 0.87665 per dollar, its highest in three months.
Meanwhile, the euro remained steady at $1.0842. The currency benefited from Germany’s new fiscal reforms, which analysts say could reshape European economic policy.
Recent labor market data added to concerns about the US economy. The Labor Department reported that nonfarm payrolls increased by 151,000 in February, below expectations of 160,000. January’s figures were also revised downward to 125,000 from 143,000.
Citi strategists noted that while job growth continues, signs of weakening in the labor market could influence Federal Reserve policy. “The Fed is likely to maintain its stance, but rising unemployment and declining participation rates may push further caution,” they said.
Market Reaction and Outlook
Trump’s recent comments on Fox News added to market jitters. He declined to predict whether the US could enter a recession, increasing uncertainty. As a result, U.S. stock futures dipped, and 10-year Treasury yields fell by three basis points.
With trade policies in flux, analysts expect continued pressure on the dollar. “If Trump is aiming for a weaker dollar, lower yields, and trade policy adjustments, the currency may struggle to gain momentum,” Saimbi added.
Investors will closely watch upcoming economic data and Federal Reserve decisions to gauge future currency movements.