The dollar index remained around 108.1 on Wednesday, maintaining a recent decline amid ongoing uncertainty over US President Donald Trump’s tariff plans.
Dollar subdued on Trump tariff uncertainty
On Tuesday, Trump signaled that he is considering a 10% tariff on Chinese imports, starting February 1, just one day after threatening Mexico and Canada with tariffs of around 25%. However, these threats have not yet been implemented, sparking hopes that the administration may adopt a more cautious approach to tariffs, potentially easing inflation concerns.
USD up since October
The dollar has been rising since October, fueled by worries that Trump’s "America First" policies and pro-growth stance could lead to higher inflation, which might deter the Federal Reserve from further rate cuts. Nevertheless, markets still anticipate a rate cut by July, with the possibility of another reduction later in the year.
