Heading into the end of the week, the US dollar is showing a clearer strengthening after the mixed price movement direction exhibited since the opening early last week.
Risk-off market sentiment is seen as the main driver of the US dollar's strengthening, following the increased attraction towards safe-haven currencies in the market driven by global tariff issues.
After President Donald Trump gave a clear signal to continue imposing tariffs on Mexico and Canada in early March, he has also recently announced 25% tariffs on Europe.
Trump made things worse when he also claimed that the existence of the 27-nation bloc also actually wants to bring down America.
The European Union (EU) warned that if the tariffs are implemented, they will immediately retaliate with tariff actions.
The tension of this tariff war is seen to be increasing the anxiety in the market, especially in important sectors of the economy and business.
Consumers will also be burdened by the cost of goods that will increase and trigger a surge in the current inflation rate in the economy.
The long-term effects will also affect the central bank's monetary policy as the Federal Reserve (Fed) struggles to reduce inflation, which has returned to an upward trend.
This situation could prompt the central bank to raise interest rates, which could affect the country's economic growth.
Investors' focus at the end of this week is on the Fed's inflation indicator, the PCE price index, which measures personal consumer spending in the United States for January.
