US Dollar gained some ground on tariff signals but remains pressured down – Crypto News – Crypto News
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US Dollar gained some ground on tariff signals but remains pressured down US Dollar gained some ground on tariff signals but remains pressured down

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US Dollar gained some ground on tariff signals but remains pressured down – Crypto News

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  • US Dollar Index stabilizes around 106.40, hovering near its lowest levels of 2025.
  • Traders anticipate rate cuts, with Fed bets now pricing in two reductions for 2025.
  • US President Trump confirms 25% tariffs on Canada, Mexico, and the EU but delays implementation until April.
  • Markets await the Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge, on Friday.

The US Dollar Index (DXY), which tracks the performance of the US Dollar against a basket of six major currencies, is attempting a modest recovery on Wednesday but remains near yearly lows at 106.50. Traders continue to weigh increased Federal Reserve (Fed) rate cut expectations and the latest tariff developments from US President Donald Trump.

Daily digest market movers: US Dollar steadies as tariff tensions rise

  • The US Dollar stabilizes around 106.40 as traders digest escalating tariff risks and growing Fed rate cut expectations.
  • On the tariff front, President Trump confirms 25% tariffs on Canada, Mexico, and the EU but delays their implementation until April.
  • On the Fed front, markets now expect two rate cuts in 2025, marking a shift from previous Fed guidance.
  • Traders await Friday’s Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge.
  • Personal income and spending reports due this week could further shape market expectations.
  • US Q4 GDP figures will provide insights into the economy’s momentum heading into 2025.

DXY technical outlook: Bulls struggle to gain control

The US Dollar Index is attempting to recover above 106.50, but momentum remains fragile. The 100-day Simple Moving Average (SMA) at 106.60 is proving a key resistance level, with technical indicators still favoring bearish conditions.

The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) both signal persistent downside pressure. If the DXY fails to reclaim 106.60, further declines toward 106.00 could materialize. Bulls need stronger catalysts to regain control, with the 107.00 level serving as the next key upside barrier.

US-China Trade War FAQs

Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.

An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.

The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.

 

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