The recent developments surrounding the US dollar, which is gaining strength due to renewed tariff threats from US President Trump and decreasing expectations for short-term interest rate cuts from the Fed, could have significant impacts on the global markets. This dynamic affects not only the US dollar itself but also other assets such as cryptocurrencies and stock indices.
Effects on the US Dollar
Tariff Threats: The renewed tariff threats from US President Trump could lead to a strengthening of the US dollar, as they put pressure on trading partners and increase uncertainty in global trade. This could lead to a flight to safe assets like the US dollar.
Interest Rate Cut Expectations: The decreasing expectations for short-term interest rate cuts from the Fed could also strengthen the US dollar. Higher interest rates make the US dollar more attractive to investors as they offer higher returns.
Impact on Cryptocurrencies
Bitcoin: The strengthening of the US dollar could negatively impact cryptocurrencies like Bitcoin. A stronger US dollar could reduce demand for alternative assets such as cryptocurrencies. Currently, there are bullish and bearish scenarios for Bitcoin in July 2025:
- Bullish Scenario: A breakthrough above 110,000 USD could lead Bitcoin to new highs, supported by ongoing ETF inflows and positive macroeconomic data.
- Bearish Scenario: A drop below 106,000 USD could lead to a correction in the range of 90,000 to 102,000 USD, triggered by geopolitical tensions or risk aversion.
Effects on Stock Markets
NASDAQ 100 Index: The NASDAQ 100 Index shows bearish price patterns despite its relative strength. A correction could begin below 21,500 points and lead down to 20,672 points, corresponding to the 61.8% Fibonacci retracement. A strengthening of the US dollar could exacerbate this correction, as it could burden the export economy of the USA.
Robinhood (HOOD): Stocks like Robinhood could be influenced by the general market development. However, a potential inclusion in the S&P 500 could strengthen the stock, as funds and ETFs would be forced to buy the stock.
Impacts on German and European Investors
Exchange Rate Risks: A strengthening of the US dollar could influence the exchange rate between the euro and the US dollar, which is significant for European investors holding US dollar-denominated assets.
Investment Decisions: The uncertainty caused by tariff threats and interest rate cut expectations could influence investment decisions. European investors may become more cautious and focus on safe assets.
Overall, the recent developments indicate that the strengthening of the US dollar due to tariff threats and decreasing interest rate cut expectations can have far-reaching effects on various markets. This dynamic requires investors to carefully monitor market developments and adjust their investment strategies accordingly.