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Thursday 8 March 2018

The dollar is a warning of a serious economic slowdown

The value of the dollar has yet to be lowered, according to some analysts who believe that there is still room for adjustment before the dollar gets better. And this downturn can be predetermined by fears for global economic recovery, analysts say.
President Trump's tariffs risk launching a global trade war that could hurt global growth, market observers say.
The dollar lost 7 percent against the yen from its peak on January 8 this year. This is interpreted as an annual loss of 34%, according to Bloomberg.
At a time when the world economy is just beginning to emerge from the crisis, one thing that could hurt this cycle is a trade war, and we are in the first phase of it, said Boris Schlossberg, Managing Director of BK Asset Management. According to him, the yen reflects this threat better, faster and stronger than other instruments.
The IMF head, Christine Lagarde, also warned of the negative impact of a potential trade war. If we witness a trade war, it will affect trade volumes and reduce global growth, Lagarde said.
Historically, the dollar has weakened as a result of fears of protectionism and trade wars. When former presidents like George Bush and Bill Clinton presented a wide range of import taxes in 2002 and 1995, the markets were selling the dollar as its value declined by 15% overall.


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