What the market has been saying about Brexit, the US, and the future of the world market
It’s not that markets have changed their minds.
But they are now seeing that markets are no longer as willing to give the US what it wants as they were a year ago.
As the markets moved to the front of the queue to trade the US dollar, they also saw that they had less room for manoeuvre.
The dollar’s decline was the biggest in the history of the benchmark index and a major blow to the US economy.
It has now fallen by nearly 25% against the greenback since the beginning of the year.
At the same time, there was a clear sign that the euro was on the verge of falling further, after a period of relative strength.
The UK and European Union agreed to extend a one-off devaluation to the currency this week.
But it could be weeks before the currency returns to its original level.
In the meantime, a further fall in the dollar could be the harbinger of a wider decline in the US and Europe, analysts say.
It is also possible that US President Donald Trump will push for a change in the way the US buys its foreign and defense imports, with the expectation that it would hurt the global economy.
It would also be a huge blow to Theresa May, who had hoped to bring the economy out of recession and into a recovery, by reducing the UK’s deficit.
However, a change to the rules of the game would be seen as a huge win for the US in the negotiations, because it would give the White House the leverage it wants to get the UK out of the EU.
The US would then be able to renegotiate the terms of the trade agreement with the EU, which it has not done for years.
However the US has not been in the mood to take such risks.
And the US remains the biggest importer of goods and services in the world, and has already reduced the US trade deficit by almost a third since 2009.
But that is not the only problem for the markets.
They are now hearing that the eurozone is heading for a further recession in the coming months, and are concerned about a fall in economic activity and the prospect of a second eurozone crisis.
The eurozone is expected to record its second-biggest economic contraction in a decade, according to data released on Monday by the European Commission.
“We are at a crossroads.
The economic recovery is coming to a screeching halt,” said one US investor, who asked not to be named.”
The markets are expecting a second recession,” he added.
But the EU is not backing down.
The bloc has announced a new fiscal pact that will help stabilise the economy, but also impose sanctions on Russia and China.
A number of EU countries have also announced a package of measures to limit the economic damage of the refugee crisis in Europe.
The euro fell against the dollar by almost 8% against a basket of currencies in early trading on Monday.
It rose against the yen by about 1% against that basket.
The pound fell by about 3% against gold.
The yen was up 0.7% against dollar and 0.4% against euro.
The Swiss franc lost 1.7%, the Swedish krona fell 0.5%, the Norwegian krone was down 0.1%, the British pound was down 2.5% and the euro gained 0.6%.
In Europe, the dollar has fallen by about 5% against its peak in December 2017.
It had lost about 15% in a year before the Brexit vote, but now stands at $1.2774.
It has also fallen against the euro, a currency which is also falling against the British Pound.
The Bank of England is due to announce its next interest rate cut later this week, and is expecting a rate cut this month as well.
This article is published in Al Jazeera’s Irish language edition.