FX.co ★ Dollar Nears 3-Week High

The US dollar index has surpassed the 104.3 threshold, achieving its highest point since March 4, as investors analyze the latest Purchasing Managers' Index (PMI) data while anticipating more clarity on President Trump's trade policies ahead of the April 2 deadline for the proposed reciprocal tariffs. Recent surveys indicate that US business activity showed improvement in March, marked by a substantial recovery in the service sector that counterbalanced a renewed decline in manufacturing output. Nevertheless, business expectations for the coming year have declined to their second-lowest point since October 2022, spurred by concerns over demand fluctuations, tariffs, and wider policy shifts from the new administration. Concurrently, President Trump suggested on Friday the possibility of "flexibility" in the tariff plan, with reports over the weekend suggesting that the measures could be less extensive, potentially excluding certain industries. On the monetary policy side, the US Federal Reserve has reiterated its lack of urgency in further reducing interest rates, despite previously indicating the possibility of two rate cuts later this year.