FX.co ★ Dollar Slips as Trade Tensions Cloud Outlook

The US dollar index dipped to approximately 103 on Tuesday, relinquishing recent gains amid persistent trade uncertainties that cast a shadow over the broader economic and inflation outlook. President Donald Trump refuted speculations about a potential pause in his comprehensive tariff strategy but indicated a readiness to engage in negotiations with trade partners. Treasury Secretary Scott Bessent revealed that nearly 70 nations have approached the White House seeking discussions on tariffs. Meanwhile, tensions escalated as Trump threatened to impose an additional 50% tariff on China should Beijing fail to remove its duties on US imports. In response, China denounced these threats as "blackmail" and pledged to "fight to the end" to protect its interests, heightening concerns of an escalating trade war. In terms of monetary policy, Chicago Fed President Austan Goolsbee stressed the importance of relying on concrete data before determining the Fed's next steps. Attention is now focused on this week’s inflation data, which could be crucial in shaping expectations for potential future interest rate cuts.