The US dollar (USD) maintained a solid position on Wednesday (July 9), although its momentum weakened slightly after a strong start to the day. The greenback opened on a slightly bullish note amid ongoing tariff tensions and cautious market sentiment. Investors remained cautious following US President Donald Trump's latest tariff threats and the extension of the deadline for reciprocal duties, which continued to dampen risk appetite and supported safe-haven funds flowing into the USD.
The US Dollar Index (DXY), which measures the greenback against a basket of six major currencies, rose about 1.5% from its July 1 low of 96.38—its weakest level in more than three years. After touching an intraday high of 97.75, the index weakened slightly to around 97.52 as the market digested the latest FOMC Meeting Minutes.
The minutes of the Federal Reserve's June meeting revealed that most officials expected an interest rate cut to be appropriate later this year, citing easing inflationary pressures and potential weakness in the economy and labor market. While some members supported the possibility of a rate cut at the next meeting, others did not see the need for a policy change in 2025. Policymakers generally viewed tariff-related inflation as likely to be transitory or limited and noted that inflation expectations remained well-conserved. The minutes also indicated increased uncertainty regarding trade policy and geopolitical developments, although overall risks have eased somewhat since the previous meeting.
US President Donald Trump escalated his tariff campaign on Wednesday by posting a new letter on his social media platform, Truth Social, targeting six additional countries: Algeria, Iraq, Libya, Brunei, Moldova, and the Philippines, with new tariffs ranging from 20% to 30%. These new tariffs, which will take effect August 1, come just two days after Trump issued similar notices to 14 other countries.
This latest move underscores Trump's aggressive push for what he calls "reciprocal tariffs," aimed at correcting what he calls unfair trade practices. The rapid expansion of tariff threats has global markets on edge, with investors closely watching how targeted countries respond and whether any breakthrough trade deals materialize before the August deadline.
In a Cabinet meeting at the White House on Tuesday, US President Donald Trump announced a 50% tariff on copper imports. "Today we're discussing copper," Trump said, emphasizing the metal's strategic importance to US industry. He also hinted that pharmaceutical imports would soon be subject to tariffs "at a very, very high rate, like 200 percent," adding that the measure would be announced soon and take effect after at least a year. (alg)
Source: Fxstreet
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