HomeTrading IdeasUS Dollar Holds Steady...

US Dollar Holds Steady as Trump Threatens 50% Tariffs on Brazil

  • Trump announces fresh round of tariffs on Brazil and smaller nations
  • But only mild risk aversion as Nvidia (NASDAQ:) drives equities higher, hits $4 trillion cap
  • Fed minutes erase July cut bets as doves in the minority, dollar supported
  • Bitcoin hits record high, comes just shy of $112,000

Trump Stuck in Tariff Mode

The original July 9 deadline for the reciprocal tariffs has come and gone with no new trade deals in sight and all hopes now resting on the new date of August 1. The European Union is racing to finalize its deal with the United States, with intense discussions focusing on reducing tariffs on cars, which is a critical industry for the bloc.

Japan is also making a desperate bid to unlock the impasse in the trade talks and negotiators are trying to set up a face-to-face meeting with Trump’s Treasury Secretary Scott Bessent.

An agreement with India is looking more doubtful, however, following Trump’s tirade this week against the BRICS organization, which India is a member of.

Sectoral tariffs are also back in the spotlight, with the President late yesterday confirming that the 50% tariffs on imports would go into effect on August 1.

Brazil Comes Under the Wrath of Trump

But that’s not the only overnight development, as Trump has just threatened Brazil with 50% tariffs and somewhat lesser duties on several smaller trading partners. Brazil was not included in the reciprocal tariff list unveiled on April 2 and was instead in line for the 10% universal levy. But what makes this move to slap the country with a steep rate of 50% more of a surprise is the fact that the US currently runs a trade surplus with Brazil.

The decision seems to be political rather than one purely based on trade grounds, as Trump is demanding that Brazil’s President, Luiz Inacio Lula da Silva, to stop the “Witch Hunt” against former President Jair Bolsonaro.

Trump, who considers Bolsonaro as his “great friend”, is unhappy about how he’s being treated by Brazil’s justice system regarding the charges against him for an attempted coup in 2022. But da Silva is not backing down and has said he will respond with countermeasures.

The other countries affected by Trump’s latest announcement are Iraq, Libya, Algeria and Sri Lanka, which all face 30% tariffs, Brunei and Moldova have been slapped with 25% levies, and the Philippines with 20% duties, all of which take effect from August 1.

Stocks Mostly Positive Amid Muted Reaction to Trump Tariffs

Yet, aside from the more than 2% slide in the Brazilian real and a more modest 1.3% drop in Brazil’s benchmark stock index, the reaction elsewhere has been muted.

is edging higher for a second day, but that’s more likely due to the ’s recent rebound levelling off.

Investors probably don’t think that these high tariff rates will be permanent, but more importantly, they believe that a deal will be struck, one way or another, with the bigger trading partners like the EU, Japan and India.

Thus, equity markets in general are perked up today, as Wall Street yesterday shrugged off Trump’s latest threats to reach for all-time highs. However, only the managed to close at a fresh record, while the hit the highest since late February when the trade war was just getting started.

Apart from the ongoing trade uncertainty, receding expectations of aggressive rate cuts by the Fed are also maintaining some caution in the markets and preventing a runaway rally in risk assets. Although this doesn’t seem to apply to AI-related stocks, with Nvidia leading the charge, ending Wednesday at a new all-time high of $162.88. Earlier in the day, Nvidia briefly topped the $4 trillion valuation mark, becoming the first company to do so.Economic Calendar

Dollar Trades in Narrow Range, Bitcoin Eyes $112,000

The Fed published the minutes of its June policy meeting yesterday, and despite recent speculation of a growing split within the FOMC, the majority of officials are aligned with the consensus view for some further policy easing later in the year. Those more worried about the downside risks to the labor market than others and those more concerned about the upside risks to inflation appear to be in the minority for now.

The dollar held near two-week highs against a basket of currencies yesterday and is trading slightly softer today. A in July has been pretty much taken off the table after the minutes, although cumulative bets for 2025 were little changed. The focus later in the day will be on the weekly jobless claims.

In crypto markets, came close to breaking above the $112,000 level for the first time on Wednesday amid strong institutional demand. The gains on Wall Street likely helped too. On the whole, Bitcoin has been consolidating since late May and cracking this key level is essential if the positive momentum is to prevail.

Most Popular

More from Author

Asia Midday: HK & SG Equities Lead; US Rally Stalls at Resistance, Dow Jones

The US stock market appeared unfazed by renewed tariff headlines on...

Gold Prices Rise on Trump’s Tariff Threats and Fed Policy Uncertainty

Tariff-Related Inflation Risks Support Gold Gold () rose by over 0.35% on...

Read Now

Asia Midday: HK & SG Equities Lead; US Rally Stalls at Resistance, Dow Jones

The US stock market appeared unfazed by renewed tariff headlines on Wednesday, 9 July. Major indices broke out from a two-day consolidation, led by a 2.8% surge in artificial intelligence giant Nvidia (NASDAQ:). The company made history as the first to reach a US$4 trillion market valuation....

Gold Prices Rise on Trump’s Tariff Threats and Fed Policy Uncertainty

Tariff-Related Inflation Risks Support Gold Gold () rose by over 0.35% on Wednesday. Markets remain focused on tariff demand letters from US President Donald Trump, with Brazil the latest country to face steep duties on and other imports. The tariffs have fuelled concerns about broader trade disruptions and...

FDA Grants Complete Approval To Moderna’s COVID-19 Vaccine For Children As Young As 6 Months – Moderna (NASDAQ:MRNA)

The U.S. Food and Drug Administration (FDA) has approved Moderna Inc.’s MRNA supplemental Biologics License Application (sBLA) for Spikevax, the company’s COVID-19 vaccine, in children six months through 11 years of age who are at increased risk for COVID-19 disease.The company’s COVID-19 vaccine, mRNA-1273, was previously available...

The Market Everyone Gave Up On Is Crushing Nasdaq 100 In 2025 – Global X MSCI Greece ETF (ARCA:GREK), Invesco QQQ Trust, Series 1...

Greece's 2010 collapse was so severe it leased islands, gutted public jobs and pensions, while some abroad even joked about selling the Acropolis to appease creditors.Fast forward 15 years, and the picture couldn't be more different.The Athens Stock Exchange has soared nearly 34% year-to-date, making Greece the...

Pfizer, Astellas Report Xtandi Survival Win In Prostate Cancer Study – Pfizer (NYSE:PFE)

Pfizer Inc. PFE and Astellas Pharma Inc. ALPMF ALPMY on Thursday released topline results from the overall survival (OS) analysis from the Phase 3 EMBARK study evaluating Xtandi (enzalutamide), in combination with leuprolide and as a monotherapy, in men with non-metastatic hormone-sensitive prostate cancer with biochemical recurrence...

The Powell-Trump Clash is Set to Escalate

Growth challenges are mounting while tariffs will lift inflation, but stagflation fears are wide of the mark. The Fed will likely delay rate cuts until the end of the year, despite escalating pressure from the president, but may move in larger steps when it does cutConsumer Caution...

Why Is AbbVie Stock Trading Higher On Thursday? – AstraZeneca (NASDAQ:AZN), AbbVie (NYSE:ABBV)

IGI Therapeutics SA, a wholly owned subsidiary of New York-based Ichnos Glenmark Innovation Inc., and AbbVie Inc. ABBV, on Thursday, announced an exclusive licensing agreement for IGI’s lead investigational asset, ISB 2001, developed using IGI’s proprietary BEAT protein platform, for oncology and autoimmune diseases.“Multispecifics including trispecific antibodies represent...

Dynamic Hedging and FX Risk Analysis Within Tactical Asset Allocation Rules

Often, investors fully hedge their portfolios for currency risk. This can lead to significant drag in performance for currencies with negative carry. However, not hedging the foreign currency exposure can lead to significant drawdowns, especially for conservative investments. In this paper, we consider a conservative, global tactical...

German CPI Confirmed at 2.0%, Euro Drifting, FOMC Split Over Cuts

The euro continues to have a quiet week and is drifting for a third consecutive day. In the European session, is trading at 1.1730, up 0.09% on the day.German Inflation Dips to 2% as food, Energy Prices FallGerman inflation rose 2.0% y/y in June, in line...

Klotho Stock Delivers 1,222% Biotech Blowout: Opportunity or Bubble? – Klotho Neurosciences (NASDAQ:KLTO)

Shares of Klotho Neurosciences, Inc. KLTO have soared more than 1000% over the past three months on promising results and breakthrough hopes. Klotho stock was in the spotlight again Thursday after announcing an FDA nod on its ALS treatment candidate. What's Driving The Rally: Klotho announced it has received...

Eurozone Economic Weakness Laid Bare as US Front-Loading Effects Wane

Eurozone data remains volatile amid trade war developments, but the underlying trend is still sluggish. Uncertainty is slowing domestic demand, which contributes to our expectation of a further rate cut from the European Central Bank in SeptemberEurozone Economy Shows Further Weakness in the Second QuarterThe eurozone economy...

SeaStar Medical’s QUELIMMUNE Wins Prestigious Award From The National Kidney Foundation, Former Winners Include Names Like Janssen, Merck and Otsuka – Johnson & Johnson...

When it comes to unmet needs in the nephrology space, acute kidney injury remains a significant concern. That's particularly true regarding pediatric AKI – each year, about 4,000 children with AKI require continuous renal replacement therapy (RRT), with a mortality rate of approximately 51-58%. Many of those...