{"id":26980,"date":"2025-07-23T07:29:51","date_gmt":"2025-07-23T07:29:51","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=26980"},"modified":"2025-07-23T07:29:51","modified_gmt":"2025-07-23T07:29:51","slug":"dollar-breathes-as-tariff-escalation-is-avoided","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-asia\/analysis\/dollar-breathes-as-tariff-escalation-is-avoided\/","title":{"rendered":"Dollar Breathes as Tariff Escalation is Avoided"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"559\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/usd1-1024x559.png\" alt=\"\" class=\"wp-image-16968\" \/><\/figure>\n\n\n\n<p><strong>Key points<\/strong> <\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The US Dollar Index (USDX) nudges up 0.1% to 97.488 after tariffs on Japan are set at 15% instead of the feared 25%<\/li>\n\n\n\n<li>Japan commits to investing $550 billion in the US, easing global investor anxiety over trade fallout<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\" \/>\n\n\n\n<p>The US dollar is showing early signs of life after President Trump struck a fresh trade deal with Japan. The agreement includes a 15% tariff on Japanese goods, well below the 25% rate he had threatened in a letter earlier this week.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">President Trump said the US and Japan had struck a trade deal that includes a lower 15% tariff that will be levied on US imports from the country, including autos <a href=\"https:\/\/t.co\/rPrKfA5HM8\">https:\/\/t.co\/rPrKfA5HM8<\/a> <a href=\"https:\/\/t.co\/TYQGGLRjXK\">pic.twitter.com\/TYQGGLRjXK<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1947904510778654880?ref_src=twsrc%5Etfw\">July 23, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>That moderation has brought a dose of relief to the currency markets, with the USDX dollar index climbing 0.1% to 97.488 as of the latest update.<\/p>\n\n\n\n<p>The breakthrough opens the door to further investment inflows. Japan\u2019s <a href=\"https:\/\/t.co\/4AZRZgC7e9\" target=\"_blank\" rel=\"noopener\" title=\"\">pledge to inject $550 billion<\/a> into the US economy adds longer-term support for the greenback, particularly amid ongoing global uncertainty.<\/p>\n\n\n\n<p>Additional deals are also in motion, with revised trade terms unveiled for the Philippines and a developing agreement with Indonesia.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Technical Analysis<\/h2>\n\n\n\n<p>The US Dollar Index continued its intraday slide before finally finding a floor at 97.009, where buyers stepped in to prevent further losses. Price action on the 15-minute chart shows a slow, sideways recovery since, though momentum remains tepid.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/1_image-23.jpg\" alt=\"\" class=\"wp-image-26982\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center\"><em>Picture: USDX tries to claw its way back above 97, as seen on the <a href=\"https:\/\/vtmarketsapp.onelink.me\/CD7D\/240525WA\" target=\"_blank\" rel=\"noopener\" title=\"\">VT Markets app<\/a><\/em><\/p>\n\n\n\n<p>The MACD has crossed above the signal line, but with minimal volume and a flat histogram, signalling a weak recovery phase rather than a confirmed reversal.<\/p>\n\n\n\n<p>The moving averages are beginning to converge, and price is attempting to reclaim the 97.15 region\u2014where 30-MA resistance is currently capping upward movement.<\/p>\n\n\n\n<p>Bulls will need a decisive break above 97.27 to shift the intraday structure into bullish territory. Until then, caution dominates.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Powell Debate Adds to the Mix<\/h2>\n\n\n\n<p>While trade rhetoric has cooled, political noise around the Federal Reserve continues to simmer. US Treasury Secretary Scott Bessent told Fox Business that Fed Chair Jerome <a href=\"https:\/\/t.co\/IBYY8A8L2b\" target=\"_blank\" rel=\"noopener\" title=\"\">Powell should remain in his post<\/a>, even after previously calling for a review of the central bank\u2019s operations.<\/p>\n\n\n\n<p>Bessent\u2019s comments serve as a reminder that policy credibility still matters in FX markets. With the Fed&#8217;s credibility under watch, any volatility in forward guidance or unexpected dovish turns could reignite downside pressure on the dollar.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Cautious Forecast<\/h2>\n\n\n\n<p>As it stands, the dollar\u2019s floor at 97.00 looks intact\u2014at least temporarily. If macro noise settles and economic data holds steady, USDX could drift higher toward 97.50\u201397.60.<\/p>\n\n\n\n<p>However, traders should remain alert. Any renewed Fed uncertainty or souring trade rhetoric could cap upside and drag the index back to test support. For now, it\u2019s a tentative recovery\u2014not a trend shift.<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/\" target=\"_blank\" rel=\"noopener\" title=\"\">Create your live VT Markets account<\/a> and <a href=\"https:\/\/myaccount.vtmarkets.com\/login?_gl=1*5vyjdn*_gcl_au*Njc1MzM0NjY0LjE3NTEzNTM4MTc.*_ga*MjA5ODA0NDIzNC4xNzI3OTE1ODQ1*_ga_J26NL1ZVX7*czE3NTE4NzkxMDYkbzMwOCRnMSR0MTc1MTg3OTExOCRqNDgkbDAkaDA.*_ga_6XQ8153GYW*czE3NTE4NzkxMDgkbzU3JGcxJHQxNzUxODc5MTE4JGo1MCRsMCRoMA..*_ga_BG6LYEHPX1*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMTgkajUwJGwwJGgw*_ga_J8BRGZSREX*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjIkajQ2JGwwJGgw*_ga_7CG6454YR5*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjIkajQ2JGwwJGgw*_ga_69Z54R4H9N*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjIkajQ2JGwwJGgw*_ga_CY2VCKFC3C*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjIkajQ2JGwwJGgw*_ga_TXZ07R2C21*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjUkajQzJGwwJGgw*_ga_17TMGY9BBE*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjUkajQzJGwwJGgw*_ga_MWDVVSEVL5*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjUkajQzJGwwJGgw*_ga_2QCC3S2748*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjUkajQzJGwwJGgw*_ga_E7D2PCX624*czE3NTE4NzkxMjYkbzUkZzAkdDE3NTE4NzkxMjYkajYwJGwwJGgw*_ga_XJ4037XKK6*czE3NTE4NzkxMjYkbzUkZzAkdDE3NTE4NzkxMjYkajYwJGwwJGgw*_ga_EJCVQDC7VT*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjYkajQyJGwwJGgw\" target=\"_blank\" rel=\"noopener\" title=\"\">start trading<\/a> now.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>USDX steadies near 97 as Japan deal eases trade fears and Powell stays in focus. &#8211; vtmarkets.com<\/p>\n","protected":false},"author":64,"featured_media":16968,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[9,11],"class_list":["post-26980","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-dollar","tag-indices"],"acf":{"acf_article_selection_author":""},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/26980","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/64"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=26980"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/26980\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16968"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=26980"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=26980"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=26980"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}