US Dollar Index (DXY) Consolidates Below 97.50 Amid Renewed Tariff Concerns

• The Dollar holds marginal gains with investors cautious amid growing trade uncertainty.
• Risk appetite remains subdued as the trade talks with the European Union and Japan remain stalled.
• The DXY trades 0.15% above Monday’s lows, but still 1% below last week’s highs.
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The US Dollar is trading moderately higher against its main peers on Tuesday, as US Treasuries rebound on the back of renewed concerns about global trade uncertainty. Still, it remains well below last week’s highs.

The negotiations with the European Union and Japan continue, but remarks from negotiators suggest that the growing demands from the US are frustrating the deal. The bloc is preparing retaliatory measures, including wide-ranging anti-coercion measures targeting US services, public tenders, and investments.

Regarding Japan, the top negotiator, Akazawa, is now in Washington to unblock the negotiations, but the deal remains elusive. Trump increased pressure on Monday, complaining about the low sales of American cars and US-produced rice in Japan, and Treasury Secretary Bessent affirmed that he is focused on the quality of the agreements, rather than on the timing.

Against this background, caution is prevailing, and major FX crosses trade within previous ranges. The DXY, which measures the US Dollar against the most-traded currencies, is trading near 97.50, after having bounced at 97.25 on Monday, yet about 1% below last week’s highs at 98.50.

(This story was corrected on July 22 at 09:17 GMT to say that the DXY is moving moderately higher on Tuesday and not on Thursday, as previously reported.)