Hopes for exemptions from import tariffs have balanced the dollar against major currencies.
Following his promise of “good trade wars”, President Trump was supposed to put his signature under a presidential proclamation aimed to define the promised tariffs later in the day.
The looming tariffs had spooked the markets. The dollar had gone down against the yen, as it usually happens when investors are trying to find a “safe haven”.
The White House sees tariffs as a necessary measure to balance out US global trade. The persistent trade deficit, which stands at a nine-year high, is caused, in Trump’s opinion, by cheap foreign goods. The tariffs, he says, could help create fair competition for American manufacturers.
However, Thursday has seen the dollar stabilising against the major currencies as the fears of tariff retaliations across the globe were soothed after the White House said there might be tariff exemptions for a number of countries, including Mexico and Canada.
The dollar stopped at 105.93, just a bit higher than the previous day 105.44 mark.
The investors are waiting for more details of possible exemptions and whether the European Union will be on the list.
They are also watching cautiously any signs of contra-measures from U.S. trade partners to whom exemptions won’t apply.