The dollar index (DXY) rose by +0.03% on Wednesday, supported by concerns that U.S. tariffs could increase inflation and hinder Federal Reserve interest rate cuts. Minutes from the June 17-18 Federal Open Market Committee (FOMC) meeting indicated a hawkish stance that further backed the dollar. However, dollar gains were limited by stock strength, reducing liquidity demand.
U.S. President Donald Trump’s commitment to maintain a stringent tariff regime, including a 10% tariff on Indian goods, fueled flight-to-safety demand for the dollar. The markets currently discount just a 5% chance of a -25 basis point rate cut at the upcoming July 29-30 FOMC meeting.
In forex markets, the euro fell by -0.04% due to a stronger dollar and lower German bund yields, while the yen fell by -0.19% despite recovering from a 2-week low. Japan’s June machine tool orders plummeted by -0.5% year-on-year, the largest decline in nine months, amidst concerns over upcoming elections.
5 Stocks Our Experts Predict Could Double In the Next Year
By submitting your email, you'll also get a free pivot & flow membership. A free daily market overview. You can unsubscribe at any time.
