- The US Dollar Index has bounced back from a six-week low of 98.58 observed on Tuesday.
- The US ISM manufacturing PMI dropped to 48.5 in May, marking a continuous decline in production.
- Market confidence is shaken as China’s Commerce Department refutes Trump’s accusations of tariff violations.
The US Dollar Index (DXY) measures the dollar’s value against six major currencies and has recovered from its recent low of 98.58, rising to nearly 98.90 during Asian trading hours on Tuesday. Traders are also keeping an eye on job openings data set to be released later today.
Despite this rebound, the US dollar has experienced its third consecutive month of decline following an index survey from the Institute of Supply Management (ISM). The manufacturing index fell to 48.5, down from a forecast of 48.7 in April and a prior reading of 49.5 in May.
On Friday, President Trump stated at a rally in Pennsylvania his intention to bolster the local steel industry by doubling tariffs, increasing them from 25% to 50% on steel and aluminum imports. This increase, which takes effect on Wednesday, raises tensions among global steel producers and intensifies the ongoing trade conflict.
The European Union has cautioned that Trump’s proposal to double steel and aluminum tariffs might derail ongoing trade negotiations. On Saturday, the European Commission expressed concerns, mentioning that Trump’s tariff actions could undermine efforts to reach an agreement.
Last week, Trump also accused China of breaching a recent tariff ceasefire, labeling the country as having “completely violated the agreement.” In response, a spokesperson for China’s Commerce Department indicated that they have adhered to the agreement, dismissing Trump’s claims and emphasizing their own measures concerning tariffs and taxes aimed at the US.
