The dollar index (DXY00) Wednesday fell by -0.09%. The dollar was under pressure Wednesday as the US-China trade rift widened after China today imposed 84% tariffs on US goods in retaliation for the US imposing a total of 104% tariffs on Chinese goods. Also, the dollar is facing a confidence crisis as the US renegotiates its relationships with its trading partners, diminishing its reserve-currency status and prompting some foreign investors to liquidate their dollar assets.
However, the dollar recovered from its worst level Wednesday after President Trump announced a 90-day pause on reciprocal tariffs to 56 countries but raised tariffs on China to 125% from 104% for its retaliation on US tariffs. Also, hawkish comments from Minneapolis Fed President Kashkari were dollar-supportive when he said there is a higher bar for Fed rate cuts due to the inflationary impact of tariffs.
