The dollar rises at the beginning of weekly trading due to Trump's threats!

The US dollar experienced a noticeable rise at the beginning of the weekly trading, coinciding with its benefiting from threats made by the elected US President, Donald Trump, in which he indicated that he would impose 100% tariffs on BRICS countries if they abandoned the dollar.

Additionally, the US dollar strengthened its gains alongside the release of some positive US economic data that boosted demand for it, owing to optimism regarding the strong performance of the US economy.

Here is an overview of the key influences on dollar movements:

Trump's Threats Support the Strength of the Dollar

The US dollar clearly benefited from the threats made by the elected US President, Donald Trump, towards BRICS countries. Trump posted on Truth Social on Saturday afternoon, stating that the idea that BRICS countries are trying to move away from the dollar while we stand by and watch is over; he added that we will demand these countries commit to not creating a new BRICS currency, nor support any other currency to replace the strong US dollar, or they will face 100% tariffs. These statements enhanced market expectations that the dollar would maintain its strength as a global currency, reinforcing its strong performance.

Positive US Data Boosts Dollar Strength

The positivity of US economic data contributed to clearly supporting the performance of the dollar, as the Institute for Supply Management (ISM) released today, Monday, the US manufacturing Purchasing Managers' Index (PMI) for November, which showed positive results that exceeded market expectations, recording about 48.4 points, surpassing the expected 47.7 points, and achieving a noticeable improvement compared to the previous reading of 46.5 points in October. This data boosted optimism regarding the economic performance of the United States, providing clear support for the dollar's performance.

Expectations of US Rate Cuts Pressuring the Dollar

Despite the supporting factors, the dollar was negatively affected by increased expectations of US interest rate cuts, as the probability of the Federal Reserve reducing interest rates by 25 basis points at its upcoming meeting was recorded at about 65.9%, while the probability of keeping rates unchanged was about 34.1%. These expectations limited the dollar's gains and affected its overall performance.

Impact of These Developments on the US Dollar Index:

In light of these factors, the US Dollar Index rose by 0.68% to settle at 106.50 points. Market participants are awaiting the release of US employment data this week.

Read also:

Trump Issues Stern Warning to the BRICS Group Regarding the US Dollar

Market Movements: Dollar Decline, Gold Surge, and Rising US Stocks!