The US dollar index dipped to approximately 103 on Tuesday, reversing some of its recent gains as ongoing trade uncertainties dampened the broader economic and inflation outlook.
Dollar slips as trade tensions cloud outlook
President Donald Trump dismissed rumors suggesting a potential pause in his extensive tariff policies but reiterated his openness to negotiations with trade partners. Treasury Secretary Scott Bessent also noted that nearly 70 countries had reached out to the White House to request talks on tariffs. However, tensions flared as Trump warned China of a further 50% tariff if Beijing does not remove its tariffs on US imports. In retaliation, China condemned the threat as "blackmail" and vowed to "fight to the end" to protect its interests, escalating concerns of a worsening trade dispute.
Focus on the Fed
On the monetary policy front, Chicago Fed President Austan Goolsbee emphasized the importance of waiting for concrete data before making any decisions on future actions. Market focus is now shifting to this week’s inflation data, which could play a crucial role in shaping expectations for upcoming rate cuts.
