The dollar was strong against the pound but weak against the euro yesterday, as it responded to poor economic data and the latest wave of tariffs.
America’s factory output contracted in November for the fourth straight month according to the latest manufacturing PMI report. The figure came in at 48.1, missing expectations of 49.2 and falling from a previous reading of 48.3.
A separate report showed that US construction spending in October also dropped unexpectedly, as investment in private projects tumbled to the lowest level in three years. This has sparked expectations of another interest rate cut next year.
Meanwhile, President Trump has announced a new wave of tariffs on steel and aluminium imports from Brazil and Argentina. This comes as Brazil and Argentina’s currencies have depreciated, making their exports to the US more competitive. As well as introducing tariffs, this has also prompted Trump to, once again, urge the Federal Reserve to cut interest rates in order to weaken the dollar.
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