Dollar Edges Higher
The dollar edged higher to 107.1 on Tuesday as traders digested the latest FOMC minutes and Donald Trump’s tariff threats. The minutes from the Fed's November 6-7 meeting revealed officials adopting a cautious approach to further rate cuts, signaling a preference for gradual adjustments.
As anticipated, the minutes made no mention of the recent election. The odds for another 25bps cut in the fed funds rate next month currently stand at about 60%. Meanwhile, in posts on his Truth Social platform, Donald Trump announced plans to impose an additional 10% tariff on all Chinese imports and a 25% tariff on goods from Mexico and Canada. The announcement initially triggered a volatile market response and bolstered the dollar, as concerns over global trade escalated.
However, traders later appeared to downplay some of these fears, awaiting further details on the proposed measures. Attention now shifts to economic data due tomorrow, including the PCE report and the second estimate of GDP growth.
Source: trading Economics