Dollar Approaches 2022-Highs
The dollar index extended gains for a 2nd session to approach 109.3 on Wednesday, after CNN reported that President-elect Donald Trump is considering declaring a national economic emergency to provide legal justification for a large swath of universal tariffs on allies and adversaries.
Early this week, reports suggested the incoming administration may consider more moderate tariff measures, but Trump dismissed such news and said his tariff policy would not be scaled back. The greenback gained further strength following yesterday's ISM Services PMI release, which indicated an acceleration in activity and rising prices.
Additionally, higher-than-expected job openings tempered expectations for further interest rate cuts by the Fed. Traders are currently pricing in only one reduction in the fed funds rate this year, mostly likely in the second half of the year. The dollar strengthened across the board, with the British pound experiencing the most significant decline.
Source: trading Economics
