Problems in American banks, euro stronger, dollar weaker

(Patria) - On world markets, the value of the dollar against a basket of currencies fell slightly last week, a consequence of the trade war between the US and China, as well as expectations that the US Fed will continue to lower interest rates, writes Investing.com.

The dollar index, which shows the value of the US currency against the six most important world currencies, fell by 0.3 percent last week, to 98.54 points.

The dollar weakened against the euro by 0.3 percent, bringing the euro exchange rate to 1.1655 dollars. The US currency also weakened against the Japanese yen, by 0.4 percent, and the dollar fell to 150.60 yen.

Trade war between China and the US

The dollar has been under pressure since US President Donald Trump threatened ten days ago to impose 100 percent tariffs on Chinese goods from November 1, as well as other measures, after China restricted the export of rare earth minerals.

China has announced countermeasures if Trump fulfills his threats, but in recent days the US president has somewhat softened his rhetoric.

The fall in the value of the dollar is also linked to indications of problems in American regional banks.

In addition, it is expected that the US central bank, after lowering interest rates in September, will do so two more times by the end of the year, by 0.25 percentage points, as the labor market in the US shows weaknesses.

This could reduce the difference between interest rates in the US and the Eurozone, given that the European Central Bank has lowered interest rates more sharply than the Fed in the past year.

The euro stabilized last week thanks to the partial calming of the political crisis in France, after the recent surprise resignation of the government.