US Dollar Index Recovers to 97.50 After Three-Day Losing Streak

US Dollar Index Rises to 97.50 After Trade Deal and Market Rebound

The US Dollar Index (DXY) — which measures the USD against a basket of six major currencies — edged higher to around 97.50 during Wednesday’s Asian trading session, rebounding from a three-day losing streak. The recovery follows improved market sentiment and the announcement of a significant US-Japan trade deal.

Trade Optimism Boosts the Greenback

US President Donald Trump unveiled a new bilateral trade agreement with Japan, which includes a 15% tariff on Japanese imports into the US. The deal also promises $550 billion in Japanese investment into the American economy and broader market access for US agricultural and automotive exports.

Explore more: How Trade Deals Influence the USD Index

Trump Targets Fed Chair Powell Again

In a surprising statement, Trump criticized Federal Reserve Chair Jerome Powell, suggesting that "he will be gone in eight months." The remarks have stirred fresh speculation about future Fed leadership and interest rate policy, although the dollar remained resilient.

During his meeting with Philippines President Bongbong Marcos, Trump also emphasized confidence in upcoming trade deals and shrugged off concerns about Manila’s growing ties with China.

Focus Shifts to PMI Data

Looking ahead, traders will turn their attention to the upcoming release of the S&P Global Purchasing Managers’ Index (PMI) figures for July, due Thursday. Strong PMI data could reinforce US economic resilience and support the Dollar further.

Key Takeaways

• US Dollar Index (DXY) rebounds to 97.50, ending a 3-day decline.
• Trump-Japan trade deal lifts sentiment, includes 15% tariffs and investment pledges.
• Trump suggests Fed Chair Powell may be removed, creating policy speculation.
• US PMI data for July due Thursday could determine the next DXY move.