The euro fell and the dollar rose as new tariffs were announced. Trump threatened a 30% tariff on imports from Mexico and the EU. Markets are used to tariff threats and are focusing on U.S. inflation data. The EU accused the U.S. of resisting trade deals.

Powell expects summer inflation due to tariffs, keeping the Fed on hold. Investors await CPI data for June, with expectations of 2.7% headline inflation and 3.0% core inflation. Fed funds futures predict interest rate cuts by year-end.

Trump criticized Powell and renewed attacks on interest rates. The dollar gained after he announced new weapons for Ukraine and threats against Russian exports. The euro fell to $1.167, and the dollar index rose to 98.07.

ECB policymakers say Trump’s tariff threats complicate decision-making but won’t derail rate pause. Analysts expect further dollar weakness, with the euro potentially reaching $1.40. Europe’s recovery and structural reforms strengthen the euro’s appeal.

The dollar rose against the yen and the peso but fell against the pound. Bank of England Governor Bailey warned of uncertainty affecting growth. Bitcoin surpassed $120,000 for the first time, with investors optimistic about policy wins.

Read more at Yahoo Finance: Traders largely shrug off tariffs before US consumer price data