The U.S. dollar edged marginally higher Wednesday, close to an over 2-week high versus major peers after U.S. President Donald Trump increased trade tensions, indicating plans to impose a 50% tariff on copper imports.

At 04:45 ET (08:45 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, edged 0.1% higher to 97.267, after touching the highest since June 25 on Tuesday.

Dollar awaits Fed’s minutes

The safe-haven dollar has received a boost after the U.S. president said he would impose a 50% tariff on imported copper and would soon roll out long-promised duties on semiconductors and pharmaceuticals.

Moreover, he announced plans to release a list of seven countries “having to do with trade” on Wednesday morning, and additional countries in the afternoon, in a social media post late Tuesday without providing further details.

This followed his decision on Monday to send letters to 14 countries, including Japan and South Korea, unveiling sharply higher tariffs on imports into the United States.

Away from the tribulations surrounding trade policies, the Federal Reserve will release minutes from its latest policy meeting later in the session, with investors keen for more insight into how policymakers see interest rates evolving over the rest of the year.

At its gathering in June, the U.S. central bank chose to leave borrowing costs unchanged at a target range of 4.25% to 4.5%, arguing that a wait-and-see approach continued to be appropriate as more clarity emerged around the impact of Trump’s tariffs on the broader economy.

“The consensus expectation is probably that two members, Bowman and Waller, will have flagged their dissent at the meeting before delivering dovish comments to the media a few days later. But if the minutes show a greater dovish front, then the dollar could take a hit as the bar for data to justify a summer cut would be lower,” said analysts at ING, in a note.

Euro slips back on tariff fears 

In Europe, EUR/USD dropped 0.2% to 1.1703, with the single currency weighed after the U.S. president said he’s drafting a tariff letter as the negotiations between the U.S. and the EU continue.

“Tariffs on the EU would mark an important escalation that can also harm the dollar, offsetting the hit on the euro. Anyway, the market’s baseline will probably remain that a EU-US deal should be agreed by the 1 August deadline, and EUR/USD may not drift far from the 1.16-1.18 area unless U.S. data surprises in either direction,” said ING.

GBP/USD gained 0.2% to 1.3595, with sterling benefiting from the trade angst as the U.K. is one of the very few countries that has already signed a trade deal with teh Trump administration.

Asian currencies weaken

In Asia, USD/JPY traded 0.1% higher to 146.70, and USD/CNY edged 0.1% higher to 7.1813, after data showed that China’s consumer price index edged up slightly in June, as increased government subsidies and a modest easing of trade tensions provided a mild boost to consumer spending.

AUD/USD edged 0.1% higher, after the sharp gains in the previous session when the country’s central bank left interest rates unchanged in a surprise move.

NZD/USD rose 0.1% to 0.6002 after the Reserve Bank of New Zealand held its interest rates steady on Wednesday, as widely expected, but signaled that a rate cut could be on the horizon if inflationary pressures continue to ease.

Cited from: Investings