FX.co ★ Dollar Slips as Trump Announces Auto Tariffs

The dollar index slipped below 104.5 on Thursday, reversing gains from the previous day as investors assessed the ramifications of President Trump's newly announced auto tariffs. Late Wednesday, President Trump declared a 25% tariff on all imported vehicles and light trucks, effective April 2. This move includes reciprocal tariffs on countries that impose duties on American goods, aligning with his commitment to uphold these tariffs throughout his second term. The intensifying trade conflict has raised concerns about potential deceleration in U.S. economic growth and a resurgence of inflationary pressures, which have caused disruption in the financial markets. U.S. consumer confidence has tumbled to its lowest point in over four years, exacerbating these worries. Additionally, Wednesday’s data revealed an unexpected decline in new orders for non-defense capital goods, excluding aircraft—a critical indicator of business investment—after three consecutive months of growth. Investors are now focusing on Friday’s release of the PCE price index report, a key inflation indicator favored by the Federal Reserve.