US Dollar remains subdued, set to end the week in red
The US Dollar (USD) eases on Friday, drifting lower in holiday-thinned trading and snapping a two-day winning streak. After climbing on the back of stronger-than-expected US Nonfarm Payrolls data released on Thursday, the Greenback is now paring gains, as market activity remains muted amid the July 4 Independence Day holiday in the United States.
The US Dollar Index (DXY), which measures the Greenback’s performance against a basket of major currencies, is trading flat during the American trading hours. At the time of writing, the index is hovering near 97.00, retreating from a weekly high of 97.42 reached on Thursday following stronger-than-expected US employment data.
The pullback comes as traders weigh strong US employment figures against broader risks, including US President Donald Trump’s protectionist tariffs and heightened fiscal concerns following the passage of his massive tax-and-spending bill.
The legislation, approved by the House of Representatives on Thursday, is projected to significantly widen the budget deficit, fueling investors' anxiety over the long-term stability of US public finances. While upbeat labor market data initially lifted the US Dollar, fears surrounding protectionist trade measures and rising debt levels are now weighing on sentiment.
US President Trump has escalated tariff tensions ahead of the July 9 deadline. He announced on Thursday that he would begin sending letters to his trading partners this Friday. His intention is, as he said, to send “10 or 12” letters to key trading partners, with more to follow in the coming days, each outlining unilateral tariff rates set to come into effect on August 1. Trump also added, referring to it, “will range in value from maybe 60 or 70% tariffs to 10 and 20% tariffs,” underscoring a more aggressive protectionist stance just days ahead of the July 9 deadline.
Source : Fxstreet
