Dollar Holds Firm Amid U.S. Tariff Turmoil

The dollar gained strength against major currencies following new U.S. tariff threats, reversing earlier risk-off moves. President Trump's plans to impose tariffs on imports continue to create market volatility. Expectations of tariffs leading to higher inflation have affected U.S. interest rate cuts, boosting the dollar.

The dollar solidified its position against key currencies on Tuesday following fresh U.S. tariff threats, leaving traders with little time to regroup after Monday's major risk-off maneuvers driven by China's new low-cost AI model.

President Trump intends to impose tariffs on imports such as computer chips, pharmaceuticals, and steel, aiming for domestic production. This move follows a de-escalation in U.S.-Colombian trade tensions.

Market speculations of universal tariffs are influencing inflation forecasts and interest rate predictions, aiding the dollar's recovery. The Federal Reserve's upcoming meeting is closely watched for potential interest rate changes.

(With inputs from agencies.)