Dollar index shows some recovery due to tarriffs uncertainty
|As you know, stock markets were stable last week, supported by strong jobs data and the US passing a major vehicle bill—referred to as a “big beautiful bill.” However, we did see some retracement toward the end of the week, likely due to profit-taking ahead of the US holiday on Friday.
Looking ahead, sentiment could shift this week with the July 9th tariff deadline approaching. There are already fresh threats regarding tariffs, especially if some countries fail to reach an agreement with the US, EU in particular. Volatility could pick up across both FX and equities then. Also, a few hours back, Trump also issued a new threat on social media, saying he would impose an extra 10% tariff on any country aligning with anti-American BRICS policies.
As for the dollar, it’s moving higher alongside US yields, but the Dollar Index shows overlapping price action from the most recent close. That suggests resistance may not be far off—we're watching the 97.50 zone closely. If reached, the market could slow down up there as part of a W-X-Y correction.
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