Dollar Index Stabilizes Amid Trade War Concerns
The dollar index stabilized around 103 on Monday after experiencing heightened volatility in recent sessions, as investors continued to assess the impact of President Donald Trump's escalating trade war on inflation and growth. The White House remained steadfast in its plans for reciprocal tariffs despite the market turmoil, with Trump saying on Sunday that “sometimes you have to take a medicine to fix something.”
'China decided to retaliate on Friday with a 34% levy on all US imports, with other major economies expected to follow suit. This stocked inflation and growth concerns in the US, clouding the outlook for Federal Reserve monetary policy. Still markets are pricing in 100 basis points of Fed rate cuts by year-end. The dollar rose slightly against the euro, sterling and antipodean currencies, while it weakened versus the safe-haven yen and Swiss franc.
Source: Trading Economics