The US dollar index remained stable around 103.5 on Thursday after gaining ground in the previous session, as investors weighed the impact of an escalating global trade war on the economy and consumers.

In the latest developments, President Trump vowed to impose additional tariffs, following retaliatory measures from the EU and Canada in response to his steel and aluminum duties.

Trump also reiterated warnings of reciprocal tariffs set to take effect next month, fueling further uncertainty in global markets. Meanwhile, US consumer inflation data released on Wednesday came in softer than expected for February, offering some relief to investors.

However, the full impact of newly implemented tariffs has yet to be realized, raising concerns that inflation could pick up again in the coming months. Looking ahead, the Fed is set to announce its policy decision next week, with markets widely expecting the central bank to keep rates unchanged while unveiling updated economic projections.

Source: Trading Economics