US Dollar Nears 3-Week High, Trump Tariffs in Focus
The US dollar index hovered around 101.3 on Friday (July 24th), nearing its highest level in three weeks. This strengthening occurred after US President Donald Trump's latest tariff policy against several major trading partners rekindled market concerns about the potential for a new tariff wall.
Under the new tariff framework, imports from several countries, including Mexico, Canada, the UK, and India, will be subject to a 10% tariff related to alleged forced labor issues. Meanwhile, goods from the European Union and Taiwan will be capped at a 10% tariff.
Products from Japan, South Korea, and Switzerland will generally face import duties of up to 12.5%, with additional charges for certain types of goods. This policy has investors reassessing the risk of global trade disruptions and potential pressure on supply chains.
The US dollar also received support from growing expectations of tighter Federal Reserve policy. Middle East tensions, which have driven up energy prices, coupled with the still-resilient US labor market, have led the market to assess the possibility of another interest rate hike.
In terms of market impact, a strengthening US dollar could put pressure on other major currencies, commodities, and risk assets. Swap markets currently estimate a 34% chance that the Fed will raise interest rates next week, with at least one hike already fully priced in for September. If trade tariffs and energy prices continue to rise, the DXY could potentially remain strong, while gold and global stocks could move more volatile. (asd)
Source: Newsmaker.id
