FX.co ★ Dollar Holds Firm Ahead of Key Inflation Report

The U.S. dollar index maintained its position above 98 on Tuesday, hovering near a three-week peak as investors anticipated the June consumer inflation report. This report is expected to shed light on the impact of the Trump administration’s tariffs on prices. Federal Reserve Chair Jerome Powell has recently suggested that inflation is likely to increase over the summer due to tariff pressures, which aligns with the growing belief that the Fed might postpone any interest rate cuts until later in the year. In parallel, concerns about central bank independence resurfaced as President Donald Trump once again criticized Powell, advocating for interest rates to be set at 1% or below. On the trade front, Trump indicated his openness to continue tariff negotiations with the European Union and other major partners. Nevertheless, he also issued a warning about imposing 100% secondary tariffs on Russia if no peace agreement with Ukraine is achieved within 50 days.