The US dollar index is hovering around 107 levels on Thursday, struggling to find a clear direction as investors assessed the latest FOMC minutes and ongoing developments in trade policies.
The minutes of the Fed's January meeting highlighted policymakers ' focus on the need for more evidence of sustained low inflation, while also warning of inflation risks from potential shifts in trade, immigration, geopolitical turmoil and strong household spending.
The minutes repeated Fed Chairman Powell's previous statement that the Fed is in no hurry to cut interest rates further.
In parallel, President Donald Trump announced plans to impose 25% tariffs on imports of cars, semiconductors and medicines, effective April 2.
Trump's initial policy proposals raised concerns with the Fed about rising inflation, as companies told the US central bank that they generally expect to raise prices to pass on the cost of import tariffs, according to the minutes of the Fed's January meeting released on Wednesday.
Investors are now considering one interest rate cut for 2025, with some speculating on the possibility of a second one.
