The US Dollar may be facing hurdles, but it’s holding its ground above the crucial 102.00 mark while markets react with unease to rising tariffs.

In the latest news, the Greenback dipped against most major currencies as escalating US-China tensions send shockwaves through global markets. China has retaliated with counter-tariffs, raising duties on all US goods to a staggering 84%, effective April 10. In response, US Treasury Secretary Scott Bessent cautioned that China will ultimately bear the brunt of this tariff conflict and urged them to negotiate swiftly.

Bessent also issued a stark warning about the risks of China devaluing its currency to escape these tariffs, suggesting it would backfire. He remarked on the potential dangers of European nations aligning with China, implying that such a move would be detrimental to their own interests.

Meanwhile, President Donald Trump took to social media, urging Americans to remain calm and optimistic, asserting that everything would ultimately turn out well. This attempt to reassure the public comes as anxiety ripples through business and political circles in the U.S.

On the economic front, markets are eagerly anticipating key data ahead of the Federal Open Market Committee (FOMC) Minutes from March’s policy meeting. While not much is expected from these minutes due to Fed Chair Jerome Powell's recent comments suggesting a 'wait-and-see' approach, speculation is rampant around potential interest rate cuts by the Fed in 2025.

In current market activity, equities are facing a downward spiral, with most experiencing declines of at least 2%. However, a glimmer of hope appears as US equities, particularly the Nasdaq, have shown signs of recovery, inching up by 1%.

Data from the Mortgage Bankers Association indicates a sharp 20% increase in weekly mortgage applications, a significant turnaround from the previous week’s -1.6%. This uptick could suggest growing confidence in the housing market.

Looking ahead, the CME FedWatch tool indicates an increasing likelihood of interest rate cuts, with May’s FOMC meeting seeing a rising chance of 53.5% for a cut, up from merely 10.6% a week prior. By June, the certainty of lower borrowing costs jumps to 100%, with expectations of a 50 basis point cut.

As for the US Dollar Index (DXY), after a brief dip earlier, it appears to be finding support near 101.90. However, this condition may not hold indefinitely. Analysts are closely monitoring this pivotal level, as a drop below could signal a deeper downturn towards the psychological 100.00 mark. Conversely, if the DXY manages to ascend past the resistance at 103.18, it could pave the way for a move towards 104.00.

In summary, while the US Dollar Index remains resilient for now, the geopolitical landscape and economic indicators may foreshadow further volatility ahead.