US Dollar rises on safe-haven demand amid looming tariffs deadline
The US Dollar (USD) kicks off the week on a firmer footing against its major peers, underpinned by safe-haven demand and reduced odds of near-term Federal Reserve (Fed) interest rate cuts. Risk sentiment sours as markets brace for the July 9 deadline, when the United States (US) is expected to formally notify trading partners of sweeping new tariffs potentially as high as 70%, targeting over 100 countries.
The US Dollar Index (DXY), which measures the value of the Greenback against a basket of six major currencies, is ticking higher during early American trading hours. At the time of writing, the index is trading around 97.40, near the previous week’s high, and up 0.35% on the day, as investors favor the US Dollar amid lingering global trade tensions and cautious market sentiment.
With the July 9 deadline just around the corner, US President Donald Trump has dialed up his tariff campaign. On Sunday, he said that the US would begin sending out final and non-negotiable tariff letters to countries starting Monday. According to Trump, around 12 to 15 letters would go out on the first day, with more to follow. These letters will outline tariff rates that vary depending on the country’s trade history, ranging from 10%–20% and potentially going up to 70%.
Ongoing trade tensions and policy uncertainty from Washington have drawn strong criticism from BRICS nations (Brazil, Russia, India, China, and South Africa), who also condemned recent US and Israeli military strikes on Iran. In a joint statement following their summit in Rio de Janeiro on Sunday, the bloc expressed “serious concerns about the rise of unilateral tariff and non-tariff measures,” which they deemed “inconsistent with WTO (World Trade Organization) rules.”
In response, President Trump doubled down, declaring on Sunday that any country aligning with what he described as the “anti-American policies” of the BRICS bloc would face an additional 10% tariff. “There will be no exceptions to this policy. Thank you for your attention to this matter!” Trump posted on Truth Social. The strong rhetoric has further unsettled markets, reinforcing the Greenback’s appeal as investors seek safety amid rising geopolitical and trade-related risks.
Source: Fxstreet
