US Dollar performance is capturing global attention as markets digest President Donald Trump’s recent tariff remarks. Following choppy trading on Monday, the US Dollar is gaining momentum early Tuesday, supported by speculation surrounding trade policy and key economic data releases later in the day.
US Dollar Climbs on Trump’s Tariff Comments
The US Dollar Index surged toward 108.00 on Tuesday morning, marking a 0.4% daily gain. This rise followed remarks from US Treasury Secretary Scott Bessent, who proposed starting universal tariffs at 2.5% and increasing them gradually. President Trump, speaking aboard Air Force One, expressed a preference for even larger tariffs, leaving room for further uncertainty. These comments have fueled the US Dollar’s rally as traders reassess global trade dynamics and their implications for currency markets.
Currency Pairs React to US Dollar Movement
- EUR/USD: After touching a mid-December high above 1.0530 on Monday, the pair reversed gains, trading under bearish pressure below 1.0450 early Tuesday.
- GBP/USD: Following three days of gains, the pair lost traction, dipping below 1.2450 during the European session.
- USD/JPY: Recovering from a nearly 1% drop on Monday, the pair is trading decisively higher above 155.70. Market participants will closely monitor the Bank of Japan’s Policy Meeting Minutes for further direction.
- AUD/USD: Weakness persists as the pair trades near 0.6250. Investors await Australia’s fourth-quarter CPI data for clarity on inflation trends.
Market Outlook and Data Releases
Later today, key US economic indicators, including December Durable Goods Orders and the Consumer Confidence Index for January, are set to influence the US Dollar’s trajectory. In commodity markets, gold (XAU/USD) has pulled back from last week’s rally, trading below $2,750 early Wednesday.
The US Dollar’s current rebound underscores its sensitivity to trade policy and macroeconomic data, setting the stage for potential volatility as new developments unfold.
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