FX.co ★ US Dollar Holds Most of Decline after EU Tariffs

The US Dollar Index (DXY) experienced a reduction in its earlier losses, stabilizing around the 99.5 level on Friday. This is its lowest point in over two weeks following US President Trump's announcement of potential 50% tariffs on European Union imports, set to commence in June. Should these tariffs be implemented, they would likely reduce the demand for goods from one of the US's primary export markets and potentially stem the flow of dollars abroad. The threat has also revived worries about Trump's unpredictable and assertive trade policies, prompting both domestic and global investors to steer clear of assets denominated in US dollars. As a result, currencies, stocks, and bonds in Europe and Asia have surpassed their US counterparts in performance this month. Moreover, concerns about US economic growth persist, exacerbated by the possibility of tariffs on Apple products. Earlier in the week, the DXY had already declined following the passage of a tax bill by the House of Representatives, which is projected to increase the US budget deficit beyond initial forecasts, shortly after credit rating agencies downgraded the US's credit standing due to worries about unsustainable debt.