The US dollar is weakening, retreating from multi-week highs, primarily against safe-haven currencies like the yen and Swiss franc. This downturn follows President Trump’s threat of new tariffs on several European countries, raising concerns about potential economic repercussions and prompting discussions of retaliatory measures. The dollar initially gained before reversing course as investors assessed the impact of the tariff threats. The US Dollar Index (DXY) is currently testing support levels.
- The dollar index fell toward 99.
- Trump threatened eight European countries with new tariffs.
- The tariffs could start at 10% on Feb. 1, rising to 25% in June.
- European leaders discussed retaliatory measures, potentially reviving plans to impose tariffs on US goods.
- The dollar initially gained against the euro and sterling before reversing.
- US Dollar Index (DXY) is trading around 99.20.
- The dollar index moves upward within an ascending channel pattern, suggesting a persistent bullish bias.
- US Dollar Index tests nine-day EMA support near 99.00
The dollar’s performance is currently being influenced by geopolitical tensions and the potential for trade conflicts. While the technical outlook suggests an underlying bullish trend, the immediate impact of tariff threats is creating downward pressure. The situation is fluid, with the dollar’s future movements heavily dependent on the resolution of trade disputes and the reactions of global markets.