The dollar index rose again above 107 levels on Tuesday as president-elect Donald Trump threatened to raise tariffs, especially on China, Mexico and Canada, which led to renewed demand for the dollar.
Trump has stated that he will impose additional tariffs of 10% on all Chinese goods, as well as 25% tariffs on imports from Mexico and Canada.
Note that the US dollar fell on Monday after Trump nominated hedge fund manager Scott Besant as Treasury Secretary, which gave the markets a sense of stability, as Besant is seen as a financial Hawk and prefers less government spending and more gradual tariffs, which is a negative factor for the dollar, and Besant's nomination eases concerns about Trump's inflationary agenda.
This week, markets are waiting for the minutes of the Federal Open Market Committee meeting today, and inflation data on personal consumption expenditures next wednesday, and these data could provide more insight into the monetary policy position of the Federal Reserve.
Currencies fell against the US dollar today, especially against the Chinese yuan, the Mexican peso and the Canadian dollar, the currencies whose countries Trump put on the list of high tariffs.
