The US Dollar Index gains traction to around 97.55 in Wednesday’s Asian session.
Trump said he will impose a 50% tariff on copper imports and suggested that more steep sector-specific duties are on the way.
All eyes will be on the FOMC Minutes, due later on Wednesday.
The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, edges higher to near 97.55 during the Asian trading hours on Wednesday. The release of the FOMC Minutes will be in the spotlight later on Wednesday.
US President Donald Trump said late Tuesday that he will impose a 50% tariff on imported copper and suggested more steep sector-specific levies are on the way. Trump also said he would soon announce tariffs “at a very, very high rate, like 200%” on pharmaceutical imports.
The lingering threat to inflation from tariffs might convince the US Federal Reserve (Fed) to hold off on cutting interest rates until next year. This, in turn, could provide some support to the Greenback. The markets are now expecting 50 basis points (bps) worth of Fed rate reductions by the end of this year, starting in October.
Traders await the release of the FOMC Minutes due on Wednesday for fresh impetus. This report might offer some hints about how Fed officials view the US economy and give insight into the interest rate path. Several Fed policymakers are also set to speak later this week. Any dovish remarks from Fed officials could drag the US Dollar lower broadly.
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