On Tuesday, March 25, 2025, the US dollar showed steady dynamics in the market, reaching its highest level in three weeks. This uptick came while traders calculated the potential impact on the market from new tariffs set by the US. Reports out of the US indicate a strong economy, despite businesses lowering their expectations for the year ahead, citing concerns over demand, customs policy, and changes under President Trump’s administration.
The US Dollar Index, which measures the dollar's value against a basket of six major currencies, saw its exchange rate at 103.98, down 0.27% from previous levels, according to MarketWatch. Throughout the day, it fluctuated between 103.94 to 104.47. Notably, since the beginning of 2025, the dollar has fallen by 4.15%, marking its worst start to the year since 2008.
In Asia, most currencies remained subdued as the dollar stabilized after four consecutive days of growth. The Indonesian rupiah suffered, depreciating to its lowest level since the 1998 Asian financial crisis due to concerns over the country's fiscal stability and economic growth. The USD/IDR pair rose by 0.7% to 16,654.6 rupiah, following a nearly 1% increase the previous week.
Bank Indonesia attributed this depreciation to a combination of global uncertainties and domestic issues, including tariff policies from the Trump administration and ongoing geopolitical tensions. The Indonesian government's ambitious infrastructure and social initiatives have compounded investor fears, leading to significant cuts in budgets for critical sectors like education and public utilities.
Meanwhile, US dollar strength also exerted pressure on Asian currencies, with the Chinese yuan rising slightly by 0.1% against the dollar, and the South Korean won gaining 0.2%. Conversely, the Japanese yen decreased by 0.1%, reflecting regional impacts from the fluctuating dollar index.
Amidst these dynamics, President Trump announced intentions to introduce more selective tariffs in April. This strategy appears to target countries with significant trade imbalances with the US, differing from broad sector-wide tariffs. Analysts speculate that these changes may lead to market volatility as more details emerge.
As for the forex market, the dollar has maintained its foothold, reflecting its resilience in a time of rising uncertainties. Trump’s administration has pitched efforts on the economy, which were bolstered by strong indicators in the service sector, positively affecting bond yields and supporting the dollar's earlier gains in the trading session.
According to the Central Bank of Russia, the dollar exchange rate is set to rise to 84.19 rubles by March 26, 2025, while the euro is pegged at 92.34 rubles. Both currencies have seen upward adjustments resulting from market activity.
The dollar index against six major currencies, as of March 25, also decreased to about 104.1 at 20:30, as the Moscow Exchange indices showed mixed results: a 0.4% drop in the Moscow Exchange index closed at 3164 points, while the RTS index fell 0.8% to finish at 1184 points.
In the commodities market, prices of Brent crude oil fell to about $73 per barrel, while WTI's futures priced around $69. Meanwhile, US sanctions targeting Venezuelan oil imports have impacted global supplies due to the country producing about 0.9% of the global oil output.
To mitigate further impacts on the US economy and keep trade lines open, the Trump administration extended Chevron Corp’s license until May 27 for oil extraction and exports in Venezuela. Chevron is crucial in Venezuelan oil production, accounting for about a quarter of the total output.
The dollar's mixed performance on other fronts included a modest specification of growth—for example, the euro rose by 0.22% to $1.0824, indicating a rebound from a low streak as investors broadly reacted to the dollar's activity.
As the market heads towards April, subsequent impacts from trade policies and their ripple effects on fiscal policies globally are poised to shape the financial landscape further. Expectations remain high as both traders and investors are closely monitoring the situation for any sudden shifts in economic forecasts and currency movements.
