In the Asian market’s early trading on Friday, the Dollar Index—a composite measure of the U.S. dollar against a basket of seven key currencies—dipped under the 100 threshold for the first time since July 2023. This decline comes on the heels of a nearly 2% drop on Thursday, marking the dollar’s most significant single-day slide since November 2022.
The downturn coincided with the White House’s confirmation of new tariff measures, raising the effective duties on Chinese imports to an unprecedented 145%. This development has spurred concern among Federal Reserve officials, with Presidents Jeff Schmid and Lorie Logan voicing apprehension that these trade actions could further complicate inflation pressures and disrupt labor market stability.
Amid these developments, the currency market is reacting to heightened recession fears and the Federal Reserve’s dovish signals, intensifying investor caution and applying downward pressure on the dollar.
