FX.co ★ Dollar Index Slides to 3-Year Low

The dollar index declined to 99.5 on Wednesday, continuing its downward trend this month to reach the lowest level in three years. This decline is attributed to President Trump's imposition of aggressive tariffs, which have cast doubt on US economic growth prospects. The President initiated an investigation into the imposition of tariffs on critical minerals, a move that could intensify the trade war with China. This action comes shortly after recent concessions on automobiles and electronics had temporarily halted the selloff of dollar-denominated assets. In addition to the potential tariffs on critical minerals, the White House has also maintained the threat of tariffs on copper, pharmaceuticals, and semiconductors. The volatility in trade relationships between the United States and its key economic partners has heightened concerns about a looming recession among major business leaders and market participants. These concerns have led to capital outflows to foreign markets, exerting pressure on the dollar, US equities, and US Treasury securities simultaneously. Despite this pressure, the dollar remains under strain even in the face of subdued inflation figures from Canada, the Eurozone, and the UK.