According to Bloomberg, the dollar gained 0.5% against a basket of major currencies yesterday following US President Donald Trump's announcement of new import tariffs on several countries. The move has bolstered investor confidence in the American economy's resilience to trade disputes.
Starting August 1, US tariffs ranging from 25% to 40% will be imposed on Japan, South Korea, Laos, Myanmar, and other nations. Bloomberg notes that Trump's global restrictions announced in April had initially raised domestic recession concerns.
A strong US employment report has meanwhile reduced expectations for Federal Reserve interest-rate cuts. Charles Schwab’s strategist Kathy Jones suggests rate reductions might be delayed until December or even next year, citing challenging conditions for policy decisions.
Data from the Commodity Futures Trading Commission reveals that speculative traders reduced their bets on the weakening of the dollar in the week leading up to early July.