While the Dollar Index Drops to Its Lowest in Three Years, Bitcoin Holds Steady

China Boosts Tariffs on U.S. Goods to 125%, Pushing Dollar Index Below Key Threshold

Tensions between the U.S. and China have escalated once again, as China raises tariffs on U.S. imports to a staggering 125%, adding fuel to the ongoing trade war.

The U.S. Dollar Index (DXY), which tracks the performance of the U.S. dollar against a basket of foreign currencies, has fallen below the 100 mark for the first time since April 2022. The index has dropped more than 10% from its recent high of 110, now hitting its lowest level in three years.

A shift in investor sentiment away from U.S. assets is putting further pressure on the dollar, particularly as trade friction with China intensifies. Research from CoinDesk earlier this year noted that the DXY was mimicking trends seen during President Trump’s first term, a pattern that now appears to be playing out.

In a dramatic turn of events, just before press time, China announced a tariff increase on U.S. goods, raising the total tariff to 125% from 84%, signaling their commitment to a hardline approach in the ongoing trade dispute.

Meanwhile, despite the dollar’s decline and the turmoil in traditional markets, bitcoin (BTC) has shown resilience. The cryptocurrency, often seen as a low-beta asset in comparison to stocks, continues to trade above $81,000, remaining relatively stable amid the volatility.