FX.co ★ Dollar Index Holds Losses at 3-Year Low

On Wednesday, the dollar index maintained its downward trajectory at the 99.6 mark, reaching its lowest point in three years. This decline is largely attributed to President Trump's introduction of additional trade barriers, which negatively affected the US economic outlook. The President initiated an investigation into imposing tariffs on critical minerals, thereby intensifying the trade tensions with China. This move came shortly after concessions on the automotive and electronics sectors had temporarily halted the selloff in dollar-denominated assets. The possibility of tariffs on essential minerals added to existing threats on commodities like copper, pharmaceuticals, lumber, and semiconductors, heightening concerns about a potential recession. This situation triggered capital outflows towards foreign markets, exerting simultaneous pressure on the dollar, US stock markets, and US Treasury securities. Meanwhile, retail sales surged in March, driven by households rushing to buy cars ahead of the anticipated tariffs on the sector. The dollar's struggles persisted despite weak inflation figures from Canada, the Eurozone, and the UK.