US Dollar Weakens as Trade Tensions Cloud Outlook
The US dollar index fell to around 103 on Tuesday, paring recent gains as persistent trade uncertainty weighed on the broader economic and inflation outlook. President Donald Trump denied rumors of a potential pause in his sweeping tariff measures but expressed a willingness to enter into negotiations with trading partners.
Treasury Secretary Scott Bessent added that nearly 70 countries have contacted the White House seeking tariff talks. However, tensions escalated as Trump threatened China with an additional 50% tariffs if Beijing fails to lift its levies on US imports.
In response, China condemned the threats as “blackmail” and vowed to “fight to the end” to defend its interests, stoking fears of a deepening trade conflict. On the monetary policy front, Chicago Fed President Austin Goolsbee stressed the need for concrete data before deciding on the next move. All eyes now turn to inflation data this week, which could be crucial in shaping expectations for future interest rate cuts.
Source: Trading Economics