US Dollar Index Climbs Toward 98.00 as Traders React to Mixed Fed Signals and Canada Tariffs

US Dollar Index Climbs Toward 98.00 as Traders React to Mixed Fed Signals and Canada Tariffs

Published: July 11, 2025
Category: Currencies | USD | Federal Reserve

DXY Extends Rally as Fed Officials Send Mixed Messages

The US Dollar Index (DXY)—which measures the USD against a basket of six major currencies—continued its upward momentum on Friday, climbing to around 97.80 during early European trading. This marks the third consecutive session of gains as markets weigh contradictory policy signals from Federal Reserve officials and fresh geopolitical risks.

Fed's Goolsbee and Waller Deliver Conflicting Outlooks

Traders remain guarded after Federal Reserve Bank of Chicago President Austan Goolsbee dismissed the idea that the Fed should lower interest rates to ease the government’s borrowing costs. He emphasized the Fed’s dual mandate of maintaining employment and price stability.

“We don’t cut rates to manage the national debt. Our job is jobs and inflation,” Goolsbee said Thursday evening.

In contrast, Fed Governor Christopher Waller has voiced support for a possible July rate cut, arguing that tariff-related inflation will likely be transitory and a pre-emptive move won’t necessarily signal political influence.

Trump Imposes 35% Tariffs on Canadian Imports

Adding further fuel to the USD’s strength, President Trump announced a new 35% tariff on Canadian imports, intensifying global trade tensions. The move is expected to shift global capital flows in favor of the USD as risk-averse sentiment rises across markets.

Key Drivers Behind the DXY Surge:

• DXY trades near 98.00, supported by cautious market sentiment
• Mixed Fed guidance keeps policy uncertainty alive
• Trump’s Canada tariff raises global trade tensions
• USD continues to act as a safe-haven amid geopolitical and economic uncertainty

Related Tredu Articles:

• Fed Watch: What Goolsbee and Waller's Comments Mean for USD
• Trump Imposes 35% Tariff on Canada: Market Impact Explained
• US Dollar Index Forecast: Will DXY Break Past 98.00?