US Dollar steady on tariff jitters – Crypto News – Crypto News
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US Dollar steady on tariff jitters – Crypto News

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4 months ago

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  • The DXY trades around the 103 zone on Monday, trying to extend Friday’s rebound amid volatile market conditions.
  • A report suggesting Trump may pause tariffs briefly lifted sentiment, but a sharp White House denial reversed optimism.
  • Resistance sits near 103.75, while 102.50 serves as key support amid mixed technical signals.

The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, is trading near the 103 area on Monday after rebounding on Friday. Market volatility intensified as headlines emerged suggesting a temporary suspension of tariffs by the United States (US), though these were quickly refuted by the White House. While equities and commodities came under pressure, the DXY held onto modest gains. Technical signals remain mixed, with the MACD showing a buy but key moving averages flashing bearish signs.

  • Markets initially rallied on reports that the US was considering a 90-day tariff pause for all nations except China, as revealed by National Economic Council (NEC) Director Kevin Hassett.
  • The optimism was short-lived after a White House spokesperson dismissed the report as untrue, reigniting safe-haven flows and dragging stocks lower.
  • US indexes reversed earlier gains; the Dow dropped over 1.5%, while the S&P 500 and Nasdaq also slipped into red territory by the afternoon.
  • Attention is shifting toward Thursday’s Consumer Price Index (CPI) data for March, which could reflect the early effects of current trade policies.
  • The White House has touted progress on curbing inflation, particularly in food and energy, but markets remain cautious ahead of the data release.

The US Dollar Index (DXY) attempts to build on Friday’s bounce, hovering near the top of its daily range. The Moving Average Convergence Divergence (MACD) signals a potential upside push, while the Relative Strength Index (RSI) at 42.80 remains neutral. Despite this, the 20-day, 100-day, and 200-day Simple Moving Averages (SMA), along with the 10-day Exponential Moving Average (EMA), continue to signal downside risk. Momentum indicators are split, with the 10-period Momentum suggesting a buy, but others like the Williams Percent Range indicating neutrality. Resistance levels are seen at 103.52, 103.72, and 103.75, while immediate support is located at 102.51. A rejection at the 103.18 zone last week reinforces that area as a pivotal point to watch.

Tariffs FAQs

Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.

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