BNY’s Bob Savage reports that the Dollar Index is firmer as higher U.S. yields and renewed geopolitical tensions underpin safe-haven demand.
President Trump’s proposal for broad new tariffs raises trade and inflation risks, reinforcing USD support
Savage also highlights iFlow data showing FX inflows into USD and risk-off positioning in bonds and equities. Tariff risks bolster Greenback “President Trump has proposed new tariffs of at least 10% on imports from 60 trading partners, following a forced labor investigation and as part of a wider effort to rebuild the tariff wall previously struck down by the Supreme Court. The Office of the U.S.
Trade Representative said Canada, Mexico, the EU, Taiwan and the U.K. would face a 10% rate, while goods from major economies such as China, India, Japan, South Korea, Brazil and Switzerland would be hit with 12.5%. The levies are not immediate and will undergo public comment and hearings before finalization, leaving room for changes.” “The move has heightened trade tensions and raised inflation risks. Outflows were concentrated in DKK, CAD, NZD and TRY, followed by BRL and CLP.