US Dollar steadies while Gold rallies on tariff talk

• The US Dollar trades fairly muted after more tariff comments from US President Donald Trump
• A 25% levy on all steel and aluminum imports from all countries will be applied. 
• The US Dollar Index (DXY) is going nowhere and trades around 108.00. 

The US Dollar Index (DXY), which tracks the performance of the US Dollar against six major currencies, is broadly flat to a touch softer and trades around 108.00 at the time of writing on Monday after again a headline-filled weekend. United States (US) President Donald Trump announced 25% steel and aluminum tariffs for all countries importing into the US. Also, plans for reciprocal tariffs are on the table, which would increase US import duties to match those imposed by the country's other trading partners.

Besides the tariff headlines, otherwise, it will be a very calm start of the week on the economic calendar. Traders will want to focus on Federal Reserve (Fed) Chair Jerome Powell's semi-annual testimony at Capitol Hill on Tuesday and Wednesday. Traders will look for fresh clues about the path forward for US monetary policy, while Powell is likely to highlight the resilient economy as a key reason central bankers are in no rush to cut borrowing costs further. 

Daily digest market movers: No clear projections

• Besides the headlines from US President Donald Trump on reciprocal tariffs and steel and aluminum import tariffs, no real timelines or dates were given, Bloomberg reports. 
• The US Treasury is auctioning a 3-month and a 6-month bill at 16:30 GMT. 
• Equities are not impressed by President Trump's announcement of more tariffs. All major indices are trading in the green on Monday. 
• The CME FedWatch tool projects a 93.5% chance that the Fed will keep interest rates unchanged at its next meeting on March 19. 
• The US 10-year yield is trading around 4.49%, recovering further from its fresh yearly low of 4.40% printed last week. 

US Dollar Index Technical Analysis: No interest

The US Dollar Index (DXY) is not breaking any pots this Monday and is not included in the safe-haven flight away from tariffs. Only Gold looks to be the big winner in this case. Meanwhile, US yields are a touch higher, though not enough to really fuel a stronger US Dollar, while traders are assessing what to do next with all these additional tariff announcements. 

On the upside, the first barrier at 109.30 (July 14, 2022, high and rising trendline) was briefly surpassed but did not hold last week. Once that level is reclaimed, the next level to hit before advancing further remains at 110.79 (September 7, 2022, high). 

On the downside, the October 3, 2023, high at 107.35 is still acting as strong support after several tests last week. In case more downside occurs, look for 106.52 (April 16, 2024, high) or even 105.98 (resistance in June 2024 and 100-day Simple Moving Average) as better support levels. 

US Dollar Index: Daily Chart