U.S. Dollar Drops 0.1% Amid Tariff Uncertainty, Stagflation Fears

The U.S. dollar experienced a slight decline on Wednesday, falling 0.1% to 104.283. This minor decrease was driven by the uncertainty surrounding U.S. tariff policies and the anticipation of key economic data releases. President Trump announced a 25% tariff on imported automobiles, with retaliatory tariffs scheduled to begin on April 2 against trading partners. This announcement has sparked concerns among investors about the potential impact on the U.S. economy, particularly the risk of "stagflation"—a scenario where high inflation is coupled with weak economic growth.

Analysts from a prominent financial institution noted that there are increasing signs that investors are worried about the potential for tariff policies to push the U.S. economy into a stagflation scenario. The market's focus has shifted to the upcoming release of the U.S. core Personal Consumption Expenditures (PCE) price index, which is a key indicator used by the Federal Reserve to gauge inflation. This data, scheduled to be released at 20:30 Beijing time, could significantly influence monetary policy decisions. Currently, the market is closely evaluating the dual impact of tariff policies on economic growth and inflation levels.