Dollar Rebounds as Market Sentiment Stabilizes
The US dollar index experienced an uptick towards the 100 mark on Tuesday, marking a modest recovery from its recent drop. This improvement is attributed to a slightly more positive outlook on the US economy. The change in sentiment came after President Trump announced exemptions for key technology products from his reciprocal tariffs and indicated the possibility of halting the proposed 25% tariffs on auto imports. Despite this positive shift, some cautiousness persists due to the US Commerce Department's national security investigations into the import of semiconductors and pharmaceuticals. On the monetary policy front, Federal Reserve Governor Christopher Waller minimized concerns regarding inflation arising from tariffs, describing them as likely temporary. He further stressed the Federal Reserve's openness to additional interest rate cuts to prioritize economic growth over short-term inflationary concerns. This recovery in the dollar follows a significant three-day decline, during which the index hit its lowest in three years amid increased policy uncertainty and a widespread selloff of US assets.
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