According to reports, the U.S. dollar climbed higher in value this week against some of its rivals. The dollar was in the spotlight for quite some time after President Donald Trump spoke about Aluminum and steel tariffs the week before. The dollar, however, stepped out from focus as the recent political developments in Europe caught the attention of traders. All announcements regarding the tariffs are expected to be made in the coming week when the dollar will come into the spotlight once again.
Soon after Trump made new announcements regarding the levies, the buck value went down for two consecutive days in the past week. President Trump stated that both Canada and Mexico will not be exempted from tariffs unless they agree to sign a renegotiated NAFTA deal.
Trump stated that the NAFTA has been bad for the U.S. due to the relocation of numerous jobs and companies.
The unclear results of the Italian election
Theresa May, Prime Minister of the U.K. stated an upcoming Brexit transition deal with the European Union. As a result, the pound climbed higher than the U.S. dollar in value.
The Euro showed a modest rise as a result of the commotion surrounding the Italian election that failed to reach a clear consensus.
The 5 Star Movement, a European populist party that gained one-third of the votes, occupies the designation of the biggest party in Italy. The unclear results will require the formation of a coalition government although the coalition groups do not seem to be in a position to offer their support for such a government. This means that Italy could be looking at a period of uncertainty.
A similar problem in Germany had just gotten resolved the previous week. The country had faced five months of political wrangling before a coalition was formed with The Social Democratic Party and the Christian Democratic Union.
A stable coalition could mean good news for stock markets since increased political stability will promote fiscal stability.
The Canadian dollar dropped in value owing to an uncertain global trade.
The U.S. Dollar, meanwhile, gained against the Yen and the Canadian dollar. The Canadian dollar is facing a slight low at the current moment due to a disrupted global trade owing to an undecided future for the NAFTA deal.