The dollar index (DXY00) today is up by +0.04%. The dollar is slightly higher today due to concerns that the US trade policy of higher tariffs will boost inflation and prevent the Fed from cutting interest rates, a supportive factor for the dollar. Gains in the dollar are limited as strength in stocks reduces the liquidity demand for the dollar.
The dollar also has support from some flight-to-safety demand after President Trump vowed to push forward with his aggressive tariff regime, stressing that he would not offer additional extensions on country-specific tariffs set to take effect on August 1. In addition, despite stating that the US was close to a trade deal with India, Mr. Trump said he would still impose a 10% tariff on India's goods for their participation in BRICS, a group of developing nations he claimed were "set up to hurt" the US.
