The dollar index hovered around 107 on Thursday, struggling to find a clear direction as investors assessed the latest FOMC minutes and ongoing developments in trade policies. The minutes from the Federal Reserve's January meeting highlighted policymakers' focus on the need for more evidence of sustained disinflation, while also warning of inflation risks from potential shifts in trade, immigration, geopolitical disruptions, and strong household spending. The minutes echoed Chair Powell's previous statement that the Fed is in no hurry to cut rates further. In parallel, President Donald Trump announced plans to impose 25% tariffs on imports of automobiles, semiconductors, and pharmaceuticals, effective April 2. Investors are currently factoring in one rate cut for 2025, with some speculating the possibility of a second.

US President Donald Trump confirms 25% tariffs on pharmaceutical and semiconductor imports are set to begin in April.
Auto tariffs also reaffirmed at 25%, adding pressure to global trade tensions.
Trump shifts focus to trade policy after a lack of progress in Russia-Ukraine peace talks.
Fed Meeting Minutes highlight concerns over balance sheet reduction and debt ceiling impact.
Fed officials indicate that slowing or pausing balance sheet runoff may be appropriate.
Some participants believe trade and immigration policies could complicate the disinflation process.
Most Fed officials view risks to inflation and employment as roughly balanced.
A few Fed officials argue that inflation risks outweigh employment risks in policy decisions.

Source: Trading Economi & Fxstreet