The dollar index (DXY00) today is down by -0.05%. The dollar is under pressure from a stock rebound, which curbs liquidity demand for the dollar. The dollar is also being pressured by concern that a global trade war could derail the economy and force the Fed to cut interest rates. In addition, the dollar is facing a confidence crisis as the US renegotiates its relationships with its trading partners, diminishing the dollar’s reserve-currency status and prompting some foreign investors to liquidate their dollar assets. Higher T-note yields today are limiting losses in the dollar.
Chicago Fed President Goolsbee said some business leaders expressed anxiety about the possibility that tariffs could send the economy back to the conditions of 2021 and 2022 when inflation was “raging out of control.”
