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The US Dollar gained nearly 1% on Monday, driven by political developments in France and tariff threats from President-elect Donald Trump. Trump’s weekend tweet warning BRICS nations of 100% tariffs if they continue their de-dollarization efforts sparked a strong bid for the US Dollar in Asian markets.
In Paris, Prime Minister Michel Barnier invoked Article 49.3 to bypass the French Parliament and pass his budget bill, triggering a no-confidence vote from both left-wing and far-right leaders. This political uncertainty added to the Dollar’s strength.
The US Dollar Index (DXY) broke through key resistance levels, heading towards 106.70. The rally was further supported by positive data from the Institute for Supply Management, which showed an uptick in the Manufacturing PMI and a drop in the Prices Paid index, indicating easing inflation pressures.
French Finance Minister Antoine Armand stated that the government would not be held hostage by the far-right National Rally party, but the looming no-confidence vote could topple the government as early as this week.
Technical analysis shows the DXY poised to test 106.52, with potential targets at 107.00 and 107.35. However, caution is advised as a downturn could see the index fall to 105.53 or lower.
In summary, the US Dollar’s rally is fueled by geopolitical tensions, political instability in France, and positive economic data, making it a strong start to the week for the Greenback.
US Dollar Surges Amid French Political Turmoil and Trump Tariff Threats
The US Dollar surged nearly 1% on Monday, driven by political developments in France and tariff threats from President-elect Donald Trump. Trump’s weekend tweet warning BRICS nations of 100% tariffs if they continue their de-dollarization efforts sparked a strong bid for the US Dollar in Asian markets.
In Paris, Prime Minister Michel Barnier invoked Article 49.3 to bypass the French Parliament and pass his budget bill, triggering a no-confidence vote from both left-wing and far-right leaders. This political uncertainty added to the Dollar’s strength.
The US Dollar Index (DXY) broke through key resistance levels, heading towards 106.70. The rally was further supported by positive data from the Institute for Supply Management, which showed an uptick in the Manufacturing PMI and a drop in the Prices Paid index, indicating easing inflation pressures.
French Finance Minister Antoine Armand stated that the government would not be held hostage by the far-right National Rally party, but the looming no-confidence vote could topple the government as early as this week.
Technical analysis shows the DXY poised to test 106.52, with potential targets at 107.00 and 107.35. However, caution is advised as a downturn could see the index fall to 105.53 or lower.
In summary, the US Dollar’s rally is fueled by geopolitical tensions, political instability in France, and positive economic data, making it a strong start to the week for the Greenback.
