The US dollar remained stable during Tuesday’s trading session after President Donald Trump announced new tariffs on metal imports, prompting investors to seek safety in the greenback amid concerns over escalating trade tensions between the United States and its key trading partners. The Dollar Index settled at 108.200, with markets awaiting the release of US inflation data, which is expected to play a crucial role in shaping the monetary policy outlook in the coming period.
In Europe, both the euro and the British pound faced selling pressure due to concerns over the potential impact of US tariffs on the European economy. The EUR/USD pair remained steady at 1.0308, while GBP/USD dropped to 1.2349 as expectations grew that the Bank of England might move toward interest rate cuts, following signals from some policymakers favoring a more dovish monetary stance.
In Asia, the Japanese yen edged slightly higher against the dollar, as investors speculated that the Bank of Japan might consider raising interest rates soon to support the local currency. Meanwhile, the Chinese yuan remained stable near 7.3053, supported by government interventions, as concerns lingered over the impact of recent US tariffs. Additionally, weaker inflation data released over the weekend signaled continued economic pressures in China.
Overall, markets remain focused on Federal Reserve Chair Jerome Powell’s testimony before Congress, which is expected to provide insight into the central bank’s stance on monetary policy. With growing bets on higher-for-longer interest rates, any signs of easing inflation could prompt a reassessment of market expectations in the coming weeks.
