The dollar index (DXY00) on Wednesday rose slightly by +0.03%. The dollar saw support from concern that US tariffs will boost inflation and prevent the Fed from cutting interest rates. Also, the minutes of the June 17-18 FOMC meeting were slightly hawkish and supportive of the dollar. Gains in the dollar were limited by strength in stocks, which reduced liquidity demand for the dollar.
The dollar also had support from some flight-to-safety demand after President Trump vowed to push forward with his aggressive tariff regime, stressing that he would not offer additional extensions on country-specific tariffs set to take effect on August 1. In addition, despite stating that the US was close to a trade deal with India, Mr. Trump said he would still impose a 10% tariff on India’s goods for their participation in BRICS, a group of developing nations he claimed were “set up to hurt” the US.
