US Dollar Index weakens below 97.50 on fresh tariff threats

• The US Dollar Index loses ground near 97.30 in Thursday's Asian session, down 0.17% on the day. 
• Fed officials split between concerns over tariff-fueled inflation and signs of labor market weakness and economic strength, noted the Fed Minutes. 
• The US weekly Initial Jobless Claims data will be the highlight later on Thursday. 

The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, retreats from near a two-week high to 97.30 amid tariff threats after US President Donald Trump unveiled a new round of tariff demand letters. 

Trump on Wednesday said he would impose a 50% tariff rate on Brazil, one of the highest so far announced for the levies, which will take effect in August. He also said that he will slap a 30% duty on Algeria, Libya, Iraq, and Sri Lanka, 25% on Brunei and Moldova, and 20% on goods from the Philippines. 

Furthermore, Trump said Wednesday that the new 50% tariff on US copper imports, which he had announced the previous day, will take effect on August 1, per Reuters. The decision was made after he received a national security assessment. The uncertainty around tariff policies and the impact of tariffs on the US economy could weigh on the Greenback in the near term.

According to the Federal Reserve's (Fed) June 17-18 meeting, FOMC Minutes, few officials expressed the view that interest rates might decrease as early as this month, while the majority of policymakers continued to have concerns regarding the inflationary pressures anticipated from Trump's implementation of import taxes aimed at altering global trade. 

Most participants at the Fed's meeting saw some reduction in the Fed funds rate this year as appropriate, citing that any price shock from tariffs was expected to be "temporary or modest."  

Later on Thursday, traders will keep an eye on the release of US weekly Initial Jobless Claims data. If the report shows a stronger-than-expected outcome, this could help limit the USD's losses in the near term. Apart from this,  the Fed officials are set to speak later on the same day, including Alberto Musalem, Christopher Waller, and Mary Daly.