The US dollar (USD) held its ground on Thursday (July 10th) after a weak start to the day, as investors digested new tariff threats from US President Donald Trump.

The US Dollar Index (DXY), which measures the greenback against a basket of six major currencies, strengthened slightly during American trading hours following stronger-than-expected weekly jobs data. At the time of writing, the index was hovering around 97.75, a level last seen on June 25th, marking a new weekly high after rebounding from a daily low of 97.27.

The greenback weakened during Asian trading hours and retraced some of this week's gains. The dollar was also pressured by a sharp decline in Treasury yields, driven by strong demand at a 10-year bond auction on Wednesday and a signal in the June Federal Open Market Committee (FOMC) meeting minutes that interest rates could be lowered later this year.

President Trump escalated his trade offensive on Wednesday by releasing a second round of tariff letters on his Truth Social platform. The new letters target seven additional countries—including the Philippines, Brunei, Moldova, Algeria, Iraq, Libya, and Sri Lanka—with proposed import tariffs ranging from 20% to 30%. This move adds to the list of countries potentially facing US trade action and has raised investor concerns about a broader global trade conflict, providing some support for the US dollar.

He also issued a strongly worded letter targeting Brazil, with 50% tariffs on its exports, citing the "witch hunt" trial of former Brazilian President Jair Bolsonaro, a far-right Trump ally. He wrote to Brazilian President Luiz Inácio Lula da Silva, calling the trial an "international disgrace" and demanding it end "IMMEDIATELY!" While analysts consider this move politically motivated, it highlights Trump's tough stance on trade. (alg)

Source: FXstreet