DXY: US Dollar Pulls Back as Tariff Jitters, Looming Inflation Data Stir Forex Trading

China’s special tariff treatment just hit 104% at midnight and now the trade war just got a whole lot more serious.

🔔 Dollar Retreats Across the Board

• The US dollar index DXY continues to be down (but not out) early Wednesday as Donald Trump’s tariffs keep pummelling stocks in the US and just about everywhere else. The latest twist? The dollar slumped to levels around 102.00 after the White House called for another 50% tariff hike on China, effective today.
• The new levy bump adds to a scorching 104% tariff treatment. Yep, you read that right — triple-digit tariffs. The trade war isn’t just back to where it was 100 years ago, it’s going nuclear.

💪 Jacked Up Tariffs Knock Forex

• “Countries like China, who have chosen to retaliate and try to double down on their mistreatment of American workers, are making a mistake,” White House Press Secretary Karoline Leavitt told reporters on Tuesday. “President Trump has a spine of steel, and he will not break.”
• With tensions ratcheting up, the FX market is officially on edge. Safe haven flows into the dollar are on pause, as traders weigh whether more pain is coming. For dollar bulls, this could be a pit stop. For every trading bro? Buckle up—currency volatility is just getting started.

👀 Market Movers in Waiting

• Today the Federal Reserve will release its minutes from officials’ meeting three weeks ago. Back then, Jay Powell said interest rates weren't going anywhere as it was too difficult to predict the effect of tariffs on the economy. The summary will show what else was a hot topic among America’s central bankers.
• And on Thursday, the consumer price index report will show if price pressures increased in March. Expectations for the CPI are set for a cool 2.6% rise, easing from February’s 2.8% clip.