U.S. Dollar Remains Largely Unaffected by Trade Uncertainty Resurgence, Says Mitsubishi UFJ

According to Mitsubishi UFJ Bank analyst Derek Halpenny on July 22, the U.S. dollar may remain largely unaffected by the latest round of American trade uncertainty in the near term. Halpenny noted that U.S. President Trump's new tariff plan is expected to roughly replicate Section 122 tariffs set to expire on Friday, which would have limited impact on exchange rates. He added that current market expectations of U.S. rate increases and elevated Middle East risks provide some support for the dollar.

However, Halpenny warned that if trade uncertainty becomes more pronounced, investors may resume selling the U.S. dollar as concerns about unpredictable policy and potential damage to the U.S. economy intensify.