Skip to content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
US Dollar Stable as Trump Administration Greenlights Tariffs

US Dollar Stable as Trump Administration Greenlights Tariffs

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- The Trump administration has decided that trade negotiations have proven fruitless and will go ahead with imposing tariffs on imported aluminum and steel from Canada, Mexico, and the EU.

- The imposition of tariffs will begin June 1; NAFTA negotiations are ongoing and exemptions for key trade partners could still be made at a later date.

- While a trade war with China may be on hold, the European Union seems poised to retaliate against the US measures.

Looking to learn more about how central banks impact FX markets? Check out the DailyFX Trading Guides.

The US Dollar has recovered its earlier losses following the announcement that the Trump administration would be moving forward with tariffs on aluminum and steel imports from its major trading partners, including Canada, Mexico, and the European Union.

The decision seems purely political, insofar as the Trump administration failed to secure any meaningful concessions from China during the recent trade spat, and so a ‘win’ elsewhere was likely sought after. Accordingly, despite the historical precedent for unilateral, protectionist trade measures to result in a weaker US Dollar, market participants are seemingly unmoved by the latest developments.

However, that is not to say that trade tensions won’t intensify further in the coming days and weeks. French Finance Minister Bruno Le Maire said that “Our US friends must know that if they were to take aggressive actions against Europe, Europe would not be without reaction.”

Similarly, EU Trade Commissioner Cecilia Malmstrom and Japanese Economy, Trade and Industry Minister Hiroshige Seko put out a joint statement on US tariff efforts, saying “This would cause serious turmoil in the global market and could lead to the demise of the multilateral trading system based on WTO rules.

DXY Index Price Chart: 5-minute Timeframe (May 30 to 31, 2018)

US Dollar Stable as Trump Administration Greenlights Tariffs

For now, the aluminum and steel tariff development is just one of several jarring developments to hit markets this week. Elsewhere, news of Italy’s government failing to form and signs that the Spanish prime minister may be removed from office by the end of the week have proven more instrumental in determining the direction of price action in the near-term. At the time of writing, the DXY Index traded at 94.16, up by +0.1% on the session.

Read more: Gold Price Outlook May Soon Turn Bullish


Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail

Follow him on Twitter at @CVecchioFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.