US Dollar gains after Trump’s tariff escalation
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The US Dollar retraces after failing to test 110.00 but remains 0.7% higher intraday. Trump imposes 25% tariffs on Canada and 10% on China, sparking concerns over inflation. The ISM Manufacturing PMI surpasses expectations, boosting confidence in US economic resilience. The DXY Index consolidates above 108.00 as traders digest trade policies and economic data. The US Dollar Index (DXY), which measures the value of the US Dollar against a basket of currencies, retreats slightly after failing to test the 110.00 level but remains well-supported above 108.00. Investor focus shifts to the latest US tariffs, with President Trump imposing a 25% tariff on Canada and 10% on China. These measures have heightened inflationary concerns, fueling speculation on how the Federal Reserve may respond. A 25% tariff on Mexico was shelved for one month after Mexican President Claudia Sheinbaum agreed to send 10,000 troops to the US-Mexico border in order to reduce drug smuggling. Both leaders said they would attempt to hammer out a trade deal to forestall the tariffs. Additionally, January’s ISM Manufacturing PMI exceeded expectations, suggesting continued strength in the US economy and reinforcing the US Dollar’s resilience in global markets. Daily digest market movers: US Dollar firms as markets assess tariffs and data The US Dollar remains elevated as markets digest the impact of Trump’s new tariffs on major trading partners. The pause of tariffs on Mexico arrested a global sell-off in financial markets, sparked by his decision to move forward with tariffs on goods from Canada and China. Trump also threatens additional tariffs on the European Union, criticizing their trade policies and lack of US imports. On the data front, the ISM Manufacturing PMI for January climbed to 50.9 from 49.3, exceeding market expectations of 49.8. The Prices Paid Index, a key inflation measure, rose to 54.9 from…
Filed under: News - @ February 3, 2025 7:27 pm