FX.co ★ Dollar Weakens on Auto Tariffs

On Thursday, the dollar index experienced a decline to 104.3, following a peak earlier in the week when it reached a near three-week high. This shift occurred amidst investors evaluating the repercussions of President Trump's newly announced auto tariffs alongside recent economic data. The Trump administration declared a 25% tariff on all vehicles not manufactured in the United States, slated for implementation on April 2. Furthermore, President Trump cautioned that he may impose significantly higher tariffs on the European Union and Canada if they coordinate measures against U.S. trade policies. This intensifying trade conflict has ignited concerns about a potential slowdown in U.S. economic growth and emerging inflation pressures. The week's economic data presented a mixed picture: Fourth-quarter GDP growth was slightly revised up to 2.4%, while core PCE prices recorded a smaller increase during the same period. Initial jobless claims were largely consistent with expectations and recent trends. However, the goods trade deficit exceeded projections, core durable goods orders unexpectedly declined, and the Conference Board's consumer confidence index plummeted to its lowest point in four years. Investors now eagerly await the PCE report expected on Friday.