US Dollar faces more selling pressure with no one safe from tariffs

NEW YORK (January 22) The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, stabilizes just below the 108.00 mark in the European trading session on Wednesday. However, selling pressure persists after US President Donald Trump released more comments on a possible 10% levy on all Chinese imports on Tuesday. Even Europe got targeted, though tariff debates seem still ongoing. 

Meanwhile, the US economic calendar is still very light. While Federal Reserve (Fed) officials remain in the blackout period ahead of the January 29 policy decision, traders focused on the Mortgage Bankers Association (MBA) Applications for the week ending January 17 on Wednesday. The previous week's surge of 33.3% was staggering, to say the least,  and traders are intrigued to see if a Trump-effect is also playing out in the mortgage market. 

Daily digest market movers: Still quiet

• The Mortgage Bankers Association (released on Wednesday its weekly Mortgage survey, which saw a very small 0.1% uptick in applications in the week ending January 17 compared to the previous week's 33.3% print. 
• Equities are tying up with gains on Wednesday. European equities are flat, while US futures are up near 0.50%.
• The CME FedWatch tool projects a 55.7% chance that interest rates will remain unchanged at current levels in the May meeting, suggesting a rate cut in June. Expectations are that the Federal Reserve (Fed) will remain data-dependent with uncertainties that could influence inflation during US President Donald Trump’s term. 
• The US 10-year yield is trading around 4.58% on Wednesday and has a long road to recovery if it wants to head back to last week’s peak near 4.75%. 

FXStreet