Trump Deepens Dollar Woes, ASML Shares Surge, More

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What is the main topic discussed in this episode?

Lizzie Burden 0:00
News when you want it with Bloomberg News Now. I'm Lizzie Burden.
Stephen Carroll 0:04
And I'm Stephen Carroll.
Lizzie Burden 0:05
The dollar is close to its weakest level in four years after suffering its deepest one-day drop since last year's US tariff rollout. The sudden decline came after President Trump said he didn't think the currency had weakened excessively.

Why is the dollar experiencing its weakest level in four years?

Lizzie Burden 0:18
The president was asked by reporters whether he was worried about the currency's drop.
Robert Kaplan 0:21
No, I think it's great. I mean, the value of the dollar, look at the business we're doing. No, no, I'd want it to be just seek its own level, which is the fair thing to do. You could have it, I could have it go up or go down like a yo-yo.
Lizzie Burden 0:35
After Trump spoke, the Bloomberg Dollar Spot Index extended losses against all of its major counterparts before steadying in Asian trading. The latest moves come as the greenback had its worst year since 2017 last year.
Stephen Carroll 0:47
The dollar sell-off has been fanned by Trump's unpredictable policymaking, which has rattled overseas allies and investors.

What impact does President Trump's statement have on the dollar's value?

Stephen Carroll 0:54
The latest slide helped push the Swiss franc to its highest level since 2015, with both the pound and the euro also hitting multi-year highs. European Central Bank Vice President Luisa Guindos had previously suggested the euro could become an alternative to the dollar if the EU increases integration. It's a message former European Commission President José Manuel Barroso was also keen to emphasise.
José Manuel Barroso 1:17
The reality is that the euro remains by far the second most important global currency, much ahead of all the others except the dollar. I think sometimes globally people underestimate the resilience of the European Union and the resilience of the euro.
Stephen Carroll 1:35
José Manuel Barroso was speaking to Bloomberg with Trump's embrace of the weaker dollar seen as a further deterrent to overseas holders of U.S. assets.
Lizzie Burden 1:44
The dollar's recent drop comes despite a rise in government bond yields and expectations that the Fed is poised to pause rate cuts at today's meeting. The president, meanwhile, has long accused other countries of seeking weaker exchange rates to boost exports, saying last year, quote, I'm the person that likes a strong dollar, but a weak dollar makes you a hell of a lot more money. But Goldman Sachs Vice Chair Robert Kaplan says prolonged dollar weakness brings with it a number of dangers for the US economy.
Unknown 2:12
Yes, it is true a weaker dollar boosts exports. However, we have in the United States has 39 trillion of debt on its way to 40 trillion plus. And when you have that much debt, I think stability of the currency probably trumps exports. And so I actually think the U.S. is going to want to see a stable dollar.
Lizzie Burden 2:33
Robert Kaplan speaking there as investors have increasingly shifted into gold in what's becoming known as the debasement trade. The price of bullion rose as much as 1.5%, having jumped 3.4% yesterday to hit a new record high above $5,200 an ounce.
Stephen Carroll 2:50
ASML has reported record fourth quarter orders for its chip making machines as the rapid development of artificial intelligence infrastructure boosts demand. The Dutch chip equipment maker announced bookings of almost 13.2 billion euros versus estimates of just under 6.9 billion. Speaking to Bloomberg, the firm's CEO Christophe Fouquet said the performance bodes well for the rest of the year.
Christophe Fouquet 3:12
We are looking at a record quarter. We are looking at a record year. So this is very good already for 2025. And in the course of last year, we sometimes had some doubts, basically, on what AI will do to our business. Because, to be honest, it took a bit of time to convert some of the great announcements we heard from the AI company to semiconductor. But the last three months have brought a lot of clarity.
Stephen Carroll 3:38
ASML CEO Christophe Fouquet speaking there as the company also announced a new share buyback programme of up to €12 billion by the end of 2028. Despite the strong results, the company says it may also cut around 1,700 jobs in the Netherlands and in the United States. Shares in ASML jumping by 7% at the Open in Amsterdam.
Lizzie Burden 3:58
Meanwhile, shares in LVMH fell more than 6% at the European Open as the group's key fashion unit struggled with weak holiday season demand.

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