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The US dollar dropped against its peers and especially against the Japanese yen. Fears of a trade war have risen. Perhaps this is not by chance.

Here is their view, courtesy of eFXnews:

ING Research discusses the  USD outlook in light of the ongoing escalation  of trade tensions between the US and China.

“Yesterday’s announcement of 25% tariffs on up to US$60bn worth of Chinese imports is clearly an escalation – and started to elicit some retaliation from China.

A weaker dollar is clearly part of the Trump economic plan.  Suffering a large net foreign liability position (around US$8trn), the dollar looks exposed if the investment environment deteriorates.

…With global equity markets still adjusting,  we continue to see more downside for DXY”  ING argues.

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