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The U.S. Dollar Index (DXY) edged lower Thursday, down 0.29% to 104.34, defying a modest uptick in Treasury yields as market focus shifted to the escalating trade dispute triggered by President Trump’s 25% tariff on foreign-made autos. The index, which hit a three-week high the previous session, is now trading just above key Fibonacci support at 103.984, with resistance capped by the 200-day moving average near 104.927.
Tariff Announcement Fuels Growth and Inflation Concerns
Trump’s tariff rollout, effective April 3, targets all imported vehicles and critical auto components, heightening global trade tension. Major U.S. trading partners—including Canada, Mexico, Germany, Japan, and South Korea—are expected to respond, prompting fears of retaliatory duties. Industry analysts warn the tariffs could raise average car prices by $5,000 to $10,000, triggering inflationary pressure and weakening consumer demand. While markets initially saw limited FX reaction, investor sentiment remains cautious with longer-term implications for U.S. growth.
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