Dollar Rallying on Hawkish Trump Trade News
Added: February 28, 2025
By: James Harte
Summary
Summary
The US Dollar has surged higher as traders react to President Trump's bullish tariff plans. Confirmation of tariffs on Mexico and Canada, along with a potential levy on Chinese imports, has fueled USD buying. Anticipation of hawkish implications for US inflation is delaying expected Fed easing.
Key Points
- Trump's tariff plans are driving USD buying.
- Potential for a 25% reciprocal tariff on eurozone imports.
- USD is gaining safe-haven flows from assets like gold and JPY.
Near-Term Risks
Trump's tariff plans are overshadowing recent US data disappointments, such as a drop in consumer confidence and higher jobless numbers. The main risk to the USD rally would be a sudden U-turn from Trump on tariffs, which could trigger a sharp recovery in risk assets.
Technical Views: DXY
The sell-off in the US Dollar has stalled. The index is now trading back above 107.24. As long as current lows at 105.97 hold, the focus is on a recovery towards the 109.35 level. Momentum studies are turning increasingly bullish.
Disclaimer
The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author. Past performance is not indicative of future results.
Risk Warning
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. A significant percentage of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd. Ensure you understand how CFDs work and whether you can afford to take the high risk.
Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors.