Tariffs Tank the Dollar 🔻
And our weekly Insider Portfolio update
Macro Markets | Trump’s Tariffs and the Sinking Dollar
Portfolio Performance | A Volatile Week, A Resilient Portfolio
1️⃣ Macro Markets | Trump’s Tariffs and the Sinking Dollar
How worrying is the weakening dollar? In times of global stress, the greenback has typically served as a safe haven. But this time, it’s slipping — and that should raise eyebrows.
Just a few months ago, Wall Street was fully committed to the so-called “Trump trade”: stronger U.S. equities, rising Treasury yields, and a resurgent dollar. Fast forward to today, and all three pillars have crumbled. American stocks are lagging their global peers, bond yields have fallen, and perhaps most unexpectedly, the dollar has sharply depreciated.
📉 On 2 April, Trump unveiled a sweeping package of new tariffs targeting virtually all of America’s trading partners. Conventional logic suggests such a move should bolster the dollar — after all, tariffs typically reduce imports and thus lower demand for foreign currencies. At the same time, heightened geopolitical tension would usually increase demand for dollars as a safe-haven asset. But instead, the greenback tumbled.
Since January 2025, the U.S. Dollar Index (DXY) has slid from near 110 to around 102 — its lowest level in months.
Note: The DXY is a trade-weighted index measuring the dollar against six major currencies: the euro (57.6% weighting), yen (13.6%), pound sterling (11.9%), Canadian dollar, Swedish krona, and Swiss franc. A falling DXY indicates broad-based dollar weakness.
💱 The dollar has slipped notably across key currency pairs:
🇪🇺 Euro: +6% YTD
🇬🇧 Pound: +3%
🇯🇵 Yen: +8%
🇨🇭 Swiss franc: +6%
🔍 So, what’s going on?
One theory gaining traction is the “dollar smile” — the idea that the dollar strengthens either when the U.S. economy is leading the global cycle, or when it’s in full-blown crisis mode. But in periods of relative stagnation — like now — the dollar tends to weaken. Markets are currently pricing in softer U.S. growth, but not a recession. As a result, the dollar is sliding toward the bottom curve of that smile.
📦 For American households, this means higher pain at the checkout. Tariffs are already raising the cost of imported goods — but unlike previous cycles, a stronger dollar isn’t cushioning the blow. Instead, consumers are now hit by both the import tax and a weaker currency. The inflationary effect is compounded.
💡 Meanwhile, as Washington re-ups its tariff playbook, America's rivals are accelerating efforts to reduce their reliance on the dollar — from alternative payment systems to local-currency invoicing. Trump’s tariff-heavy trade strategy may reinforce protectionist instincts, but it also risks undermining the very currency that underpins U.S. global influence.
The dollar isn’t dethroned just yet. But its role as an unchallenged hegemon? That might already be slipping.
2️⃣ Portfolio Performance | A Volatile Week, A Resilient Portfolio
While Trump officials doubled down on their tariff rhetoric, global markets took a beating. European equities plunged on Monday, with both the Stoxx Europe 600 and the UK’s FTSE 100 shedding over 5%. Asian markets followed suit — Japan’s TOPIX dropped 9%, and trading in Taiwanese tech giants TSMC and Foxconn was halted after heavy sell-offs.
Commodity prices mirrored recession fears. Brent crude sank from $74 to under $64 per barrel within days. Copper prices tumbled from above $5 per pound to below $4.40 ⬇️.
💼 Yet despite the chaos, our portfolio remained remarkably resilient, delivering a strong +6.8% gain last week. That’s largely thanks to a well-positioned hedge — a timely allocation that helped absorb global volatility (we have explained the detailed strategy in our last Friday premium edition).
📌 In an environment where individual stock movements are often hostage to macro shocks, our strategy will increasingly focus on global trend mapping. Expect more high-conviction macro calls, paired with a curated watchlist of stocks worth adding to — backed by both structural growth and defensive fundamentals.
Stay with us. In turbulent markets, disciplined positioning makes all the difference.
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This information is for guidance purposes and may become out of date at any given time. It is not investment advice. Investments can rise and fall in value. Genuine Impact won’t make any assessment of whether the investments you choose are appropriate or suitable for you. If you are unsure of the suitability of any investment, investment service or strategy, you should seek independent financial advice. Past performance does not indicate future results. Your capital is at risk.
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