Dollar Pares Some Losses
The dollar index pared some losses to trade around 104 on Thursday as traders continued to monitor developments in the ongoing trade war while awaiting further clarification on policy measures.
Commerce Secretary Lutnick said that more one-month tariff exemptions beyond autos are likely. Early, the Trump administration delayed auto tariffs on Mexico and Canada by one month for automakers whose vehicles comply with the USMCA.
Despite the slight recovery, investor sentiment remained cautious amid concerns over the broader impact of tariffs and Trump’s policies on the US economy. US trade deficit widened to a record high in January, driven by a 10% surge in imports ahead of anticipated tariffs. Additionally, job cuts soared to their highest level since 2020, fueled by significant layoffs at DOGE.
However, initial jobless claims came in below expectations, offering some reassurance. Investor focus is now shifting to the jobs report, alongside an appearance by Fed Chair Powell tomorrow.
Source: Trading Economics