The US dollar is on track for its strongest weekly performance in nearly three years, driven by investor confidence that President Donald Trump’s new tariffs have had little negative impact on the economy or inflation, according to Jinshi Data.
Despite Trump’s continued pressure on Federal Reserve Chair Jerome Powell to cut interest rates, the Fed has signaled it is in no rush to act, keeping its policy stance steady for now.
Market strategists say that even if the upcoming non-farm payroll (NFP) report delivers weaker-than-expected data, any dollar pullback would likely be short-lived.
“The US economic fundamentals remain sound, and tariffs have caused minimal damage,” said Chris Beauchamp, Chief Market Strategist at IG. “Short-term selling pressure may emerge, but it’s more a pause than a shift in trend.”
Analysts note that unless extremely negative economic data emerges before the Fed’s September meeting, expectations for a near-term rate cut are unlikely to return.
The dollar’s strength underscores investor sentiment that the US economy remains resilient, with tariffs failing to trigger the inflation spikes or trade shocks many feared.