FX.co ★ Dollar Index Stabilizes Amid Trade War Concerns

The dollar index maintained a level around 103 on Monday, following significant fluctuations in recent sessions. This period of adjustment comes as investors continue to evaluate the implications of President Donald Trump's intensifying trade war on inflation and economic growth. Despite the market's volatility, the White House remains firm on implementing reciprocal tariffs, with Trump commenting on Sunday that "sometimes you have to take medicine to fix something." In response, China announced a 34% levy on all U.S. imports on Friday, prompting expectations that other major economies might take similar actions. This development has heightened concerns regarding inflation and growth within the U.S., adding uncertainty to the Federal Reserve’s monetary policy direction. Nonetheless, market projections still forecast 100 basis points of Fed rate cuts by the end of the year. In foreign exchange movements, the dollar saw slight gains against the euro, pound sterling, and antipodean currencies, but weakened against the safe-haven yen and Swiss franc.