The US Dollar Index (DXY) traded near the 101 area on Thursday (10/4), continuing to decline after failing to maintain the recovery momentum from the beginning of the week. This movement occurred as new tariff measures confirmed by the White House raised the effective tariff on Chinese imports to 145%. Federal Reserve (Fed) officials, including President Jeff Schmid and Lorie Logan, warned that this trade action risks worsening inflation and labor market dynamics.

On the technical side, the MACD continues to signal selling pressure, while the Relative Strength Index hovers just above the oversold area. With the downward momentum intensifying, the DXY remains vulnerable.

Daily Market Movers Summary: US Dollar Slips as Fed Raises Inflation Risks

The White House confirmed an increase in tariffs on Chinese goods, raising the effective tariff to 145% while maintaining the 10% baseline for other goods. Fed officials issued a stark warning, highlighting how the surprise tariff spike could push consumer prices higher and complicate monetary policy decisions. Dallas Fed's Logan said unexpected trade moves could trigger job losses and fuel inflation, forcing the central bank on the defensive. Latest jobless claims rose slightly to 223,000, while continuing claims fell to 1.85 million, sending mixed signals on the employment front. Despite recent volatility, Fed policymakers avoided direct mention of March CPI in their latest comments, though markets remain sensitive to inflation figures. (Newsmaker23)

Source: FXstreet