US Dollar slips as recession fears and tariff confusion weigh on sentiment
The US Dollar (USD) retreats on Thursday as a cocktail of mixed economic data, dovish Federal Reserve (Fed) signals, and murky US-China tariff messaging unsettles market sentiment. After testing highs near 100.00 early in the day, the US Dollar Index (DXY) reversed course and was last seen drifting around 99.41, down 0.37%.
Investors recalibrated expectations after US President Donald Trump and Treasury Secretary Scott Bessent pushed back against claims of a unilateral tariff cut on Chinese goods. While Trump hinted at potential tariff relief if talks progress, Chinese officials reiterated that no negotiations were currently underway, demanding the removal of reciprocal tariffs before dialogue resumes.
Fed officials added further intrigue. Cleveland Fed President Beth Hammack stressed caution but acknowledged the potential for rate adjustments as early as June. Meanwhile, Governor Christopher Waller warned that firms remain paralyzed by tariff-induced uncertainty, hinting at broader economic spillovers.
Source: Fxstreet