- The US dollar index extends earnings at 100.86 on Friday before reversing its course.
- Trump proposes an 80% tariff to Chinese products, urging China to open their economy to American products.
- The American dollar index seems to be ready to test an anterior vital resistance in 100.22 now as support.
The US dollar index (DXY), which tracks the performance of the US dollar (USD) compared to six main currencies, is quickly reversing its course this Friday before the commercial negotiations from the United States (USA) with China in Switzerland during the weekend. The DXY index quotes about 100.45 at the time of writing, after reaching a maximum of almost a month of 100.86 earlier in the day. Euphoria for the United Kingdom Commercial Agreement (United Kingdom) with the US is discarded as if it were not a commercial agreement at all. The US maintains its 10% tariffs on the United Kingdom products while getting better and easier access to the United Kingdom’s consumer markets.
It was not at all a comprehensive and complete commercial agreement that US President Donald Trump promised in the anteroom of the announcement. Such poor agreement is being negotiated with one of the smallest countries in terms of exposure to the US, and establishes the scenario so that the commercial negotiations of this weekend with China do not take place so fluidly. Although President Trump, according to Fuentes, said that tariffs could go down to 50% if China cooperates this weekend, it seems rather that the US is not the strongest part sitting at the negotiating table, Bloomberg reports.
What moves the market today: again on tariffs
- As already mentioned, China and the US will meet in Switzerland for commercial negotiations during the weekend. However, no commercial agreement will be discussed, but only to deactivate the situation. In addition, the Chinese Ministry of Commerce has reiterated several times this week that trade negotiations can only take place if the US unilaterally eliminates its tariffs.
- Just before the US negotiation session, Trump commented on Truth Social Network that an 80% tariff to Chinese products ‘seems correct’ while urging China to open their markets to the US, before the commercial negotiations of this weekend.
- A series of Fed speakers are scheduled to speak this Friday:
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- At 12:30 GMT, the governor of the Federal Reserve Adriana Kugler and the president of the Fed of New York John Williams pronounce a speech on employment at the Economic Conference of Reykiavik 2025 in Iceland.
- At 14:00 GMT, the president and CEO of the Bank of the Federal Reserve of Chicago, Austan Goolsbee, shares opening comments at the Fed Listens event, perspectives from the west, at the Bank of the Federal Reserve of Chicago.
- At 15:30 GMT, the governor of the Federal Reserve Christopher Waller participates in a round table on monetary policy research at the Hoover monetary policy conference in Stanford.
- At 22:45 GMT, the governor of the Lisa Cook Federal Reserve, the president of the Bank of the Federal Reserve of Cleveland Beth Hammack and the president of the Fed of St. Louis Alberto Musalem participate in a round table on productivity dynamics at the Hoover monetary policy conference in Stanford.
- The actions are green on Friday, although not massively. European indices rise 0.5% on average. The US futures are flat or slightly higher, less than 0.5%.
- The CME Fedwatch tool shows the possibility of an interest rate cut by the Federal Reserve at the June meeting at 17.1%. Later, the decision of July 30 is likely that rates are lower than current levels at 63.2%.
- The yields of 10 years from the US are quoted around 4.38%, rising again after the fall in the middle of the week.
Technical analysis of the US dollar index: be attentive to daily and weekly closure
He Dollar index American (DXY) has exceeded substantial resistance in 100.22 and begins to look bullish. However, there are some questions, since the first commercial agreement after the ‘Day of Liberation’ still maintains US tariffs. This means high prices for US consumers who want to buy specific products from the United Kingdom, which could still feed a stagflation scenario.
On the positive side, the first resistance of the DXY is located in 101.90, which acted as a key level during December 2023 and as a basis for the formation of inverted head and shoulders (H&S) during the summer of 2024. In case the dollar bundles push the even higher DXY, the simple mobile average (SMA) of 55 days in 102.47 comes into play.
On the other hand, the previous resistance in 100.22 should now act as support. The support at 97.73 could be quickly tested before any substantial bearish holder. Below, a relatively thin technical support is located at 96.94 before looking at the lowest levels of this new price range. These would be 95.25 and 94.56, which would mean new minimums not seen since 2022.
US dollar index: daily graphics
FAQS tariffs
Although tariffs and taxes generate government income to finance public goods and services, they have several distinctions. Tariffs are paid in advance in the entrance port, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, while tariffs are paid by importers.
There are two schools of thought among economists regarding the use of tariffs. While some argue that tariffs are necessary to protect national industries and address commercial imbalances, others see them as a harmful tool that could potentially increase long -term prices and bring to a harmful commercial war by promoting reciprocal tariffs.
During the election campaign for the presidential elections of November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy. In 2024, Mexico, China and Canada represented 42% of the total US imports in this period, Mexico stood out as the main exporter with 466.6 billion dollars, according to the US Census Office, therefore, Trump wants to focus on these three nations by imposing tariffs. It also plans to use the income generated through tariffs to reduce personal income taxes.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
