TLDR
- 10-year government debt gear fell to 4%, the lowest level of six months
- US Dollar Index (DXY) fell to 102, a six -month low
- Trade War Problems and Customs can create a “Shipment Shock” in the United States
- Gold reached all the time with Market Cap of $ 21 trillion
- Bitcoin had $ 82,000 support in spite of financial uncertainty
The exchange of 10-year US government debt touched short 4.0% on April 3, down from 4.4% a week earlier. This marks the lowest level for long -term US government debt in six months. The decline comes when investors react to growing concerns about the global trade war and the weakening of the US dollar.
At the same time, the US Dollar Index (DXY) fell to 102, its lowest level in six months. On Thursday, the index fell to a further $ 101.96 and marked a decline of 1.78%. This represents the lowest value since the beginning of October.
The euro, which is the largest component in the index, received 1.5% to reach a six -month height of $ 1,1021. Other currencies also showed strength against the dollar, with Swiss francen rising 2.14% and the Japanese yen increased by 1.80%.
The effect of customs on the economy
The recent decline in both the Treasury and the dollar can be attributed to President Donald Trump’s announcement of new mutual tariffs. These tariffs will enter into force on April 9 and have received speculation on several interest rate reductions from the Federal Reserve this year.
Axel Merk, Head of Investment Manager at Merk Investments, explained that tariffs create a “delivery shock.” This means that reduced accessibility of goods and services due to rising prices causes an imbalance in relation to demand. The effect is stronger when interest rates drop.
This combination potentially paves the way for inflation pressure. In such a scenario, the appeal of interest -worn investments as bonds decreases significantly. Investors can look for alternative assets that offer better returns.
Alternative assets receive appeal
As the dollar weakens and concerns about inflation increase, alternative assets become more attractive to investors. Gold has already risen to consecutive time and reaches a market capitalization of $ 21 trillion.
Higher gold prices allow previously unprofitable mining operations to resume. They also encourage additional investments in exploration, extraction and refining. When production expands, growth growth will of course serve as a limiting factor in Gold’s long -term bull driving.
Bitcoin is another alternative asset that can benefit from the current financial situation. Although a higher risk of economic recession at first glance may seem negative for bitcoin, lower returns from investments in interests to alternatives to alternative assets, including cryptocurrencies.
Bitcoin resistance
Despite the exacerbated global economic uncertainty, Bitcoin has shown remarkable resilience. Cryptocurrency managed to keep its support level of $ 82,000. This is an encouraging sign of its strength for market turbulence.
Over time, traders are likely to reduce exposure to bonds, especially if inflation rises. This can potentially lead to significant inflows to alternative assets. If only 5% of the world’s $ 140 trillion bond market is looking for higher returns elsewhere, it can translate to $ 7 trillion in potential inflows into equities, goods, real estate, gold and bitcoin.
The trade war can also lead to a gradual shift from the US dollar, especially among countries that feel pressured by its dominant role. Japan, China, Hong Kong and Singapore have a collective $ 2.63 trillion in US Treasury. If these regions choose to take revenge, bond rates may reverse their trend.
This would increase the cost of new debt issue for the US government and further weaken the dollar. In such a scenario, investors would probably avoid adding exposure to shares, which ultimately favors scarce alternative assets such as bitcoin.
Deutsche Bank Research expressed concern in a note and stated, “Dollar Safe Haven’s properties are eroded and this entails a significant cost for unloved dollar possession.” They added, “The development since the beginning of the year is worried about a broader undermining of confidence in US economic prospects.”
Investors are now turning their attention on Friday’s report on Non -Farm PayRolls. This can provide further insight into the Federal Reserve’s next political feature. The road to a Bitcoin All-Time High 2025 is likely to remain despite current market uncertainty.
