11:15 GMT Currency Chaos: Dollar’s Plunge Shakes American Economy

Dramatically, the dollar has suffered a staggering fall, losing over 2.6% against the euro on Thursday, 3rd April. This downturn comes just a day after President Donald Trump launched a major trade offensive that has sent ripples of fear through the American economy—an upheaval not seen since 2015, according to Bloomberg.

At around 11:15 GMT (13:15 in Paris), the greenback plummeted by 1.82%, trading at 1.1055 dollars per euro, after hitting a low of 1.1144 dollars—its weakest position since September 2024.

The American currency also faced significant losses against the British pound, down 1.13% to 1.3156 dollars, and against the Japanese yen, which saw the dollar drop by 1.76% to 146.65 yen.

Ricardo Evangelista from ActivTrades observes that “The dollar’s weakening signals that investors are increasingly worried about growth risks in the US, potentially forcing the Federal Reserve to cut interest rates more aggressively than originally planned.”

Lower interest rates would make the dollar less appealing to investors, encouraging them to seek alternatives.

In stark contrast, European operators are bracing for an uptick in fiscal stimulus measures, which provide additional support to the euro.

Trump’s aggressive protectionist policies, reminiscent of the 1930s, involve a blanket 10% tariff on all imports and increased duties on countries deemed particularly unfriendly in trade.

European goods will face a hefty 20% tax, while Japan and Switzerland will see their tariffs rise to 24% and 31%, respectively.

Chinese products are particularly targeted, with an eye-watering new import tax of 34% layered on top of the existing 20% tariffs imposed by Washington.

Experts warned that such measures could hinder China’s economic growth, which surprisingly saw the dollar gain 0.37% against the yuan offshore, now trading at 7.2952 yuan per dollar.

This widespread 10% tariff is set to take effect on April 5th at 04:01 GMT, with the escalated rates commencing on April 9th.

Stephen Innes, an analyst at SPI AM, raises the alarm: “Without any fiscal compensation—no tax cuts or significant growth stimulus—the American economy is confronting this shock with no safety net.”

This concern is compounded by the potential retaliatory measures from affected countries.

Michael Pfister of Commerzbank added a note of caution, stating:

“Whether Trump can successfully bring production back to the US, this process will take time. In the meantime, the US will have to import more expensive goods.”

On the other hand, there is a strong possibility that the Federal Reserve will lower interest rates to bolster the American economy, with Ipek Ozkardeskaya from Swissquote Bank suggesting that “the impact of tariffs on inflation will likely be transitory and short-lived, partly offset by a marked economic slowdown.”

In the midst of this financial turmoil, gold—a traditional safe haven—reached new heights, peaking at $3,167.84 per ounce late Wednesday night, before retreating slightly on Thursday.

Exchange Rates:

Thursday Rates at 11:15 GMT compared to Wednesday’s rates at 21:00 GMT:

11H15 GMT 21H00 GMT
EUR/USD    1,1055     1,0853
EUR/JPY     162,12     162,02
EUR/CHF     0,9540     0,9570
EUR/GBP     0,8403     0,8344
USD/JPY     146,65     149,28
USD/CHF     0,8629     0,8817
GBP/USD     1,3156     1,3007

As the dust settles on this chaotic day in the markets, all eyes will remain firmly fixed on the economic repercussions of Trump’s aggressive trade policies, which may indeed reshape the landscape of global trade and the dollar’s value in the months ahead.

Source: Defi Media