The US Dollar Index (DXY) rose to 100.958 on July 21, up 0.006 points (0.006%) from the previous close of 100.952, reflecting the dollar's value against six major currencies. The dollar gained strength as reports indicated the US would impose new tariffs on major trading partners this week, replacing the existing 10% global tariff set to expire July 24. Pro-Iranian Yemen Houthi rebels escalated threats against Saudi Arabia by announcing a maritime blockade, emailing global shipping companies to prohibit cargo loading and unloading at all Saudi ports. The tariff transition follows the invalidation of Trump's reciprocal tariff policy in February, with the Financial Times reporting that new tariffs are expected near current 10% levels, though the administration is conducting additional investigations to secure legal authority for higher rates.
Dollar Index Records 0.006% Gain on July 21
According to Yonhap Infomax (screen number 6411), the Dollar Index stood at 100.958 as of 7:43 AM Eastern Time on July 21 in the New York foreign exchange market. The index, which measures the dollar's value against six major currencies, increased 0.006 points (0.006%) from the previous session's closing price of 100.952. The dollar reversed to gains following the Financial Times report that President Donald Trump would impose tariffs on major countries this week. The dollar threatened the 101 level at the end of London trading on concerns that higher tariffs could stimulate US inflation.
Trump Administration Plans New Tariff Structure Before July 24 Expiration
President Trump imposed a 10% global tariff on all countries in February after reciprocal tariffs were invalidated, with this policy set to expire on July 24. The Financial Times reported that new tariffs are expected to be similar to the current 10% level, but the administration is conducting additional investigations to secure legal authority to impose higher tariffs. The tariff policy transition is scheduled to occur this week as the existing global tariff reaches its expiration date.
Yemen Houthi Rebels Announce Saudi Port Blockade
Yemen Houthi rebels sent emails to multiple global shipping companies prohibiting the loading and unloading of cargo at all Saudi ports. The rebels issued a statement declaring, "We are immediately implementing a maritime blockade against the Saudi enemy simultaneously with the release of this statement." This represents a substantive threat against Saudi Arabia, the world's largest oil producer. West Texas Intermediate (WTI) crude oil for August delivery traded above $84 per barrel, up more than 1% from the previous session. US online media outlet Axios reported, citing multiple sources, that mediating countries proposed a 10-day ceasefire to reopen the Strait of Hormuz and resume negotiations between the US and Iran.
Currency Pairs Show Mixed Movements Against Dollar
The pound-dollar exchange rate fell to $1.34096, down $0.00255 (0.190%) from the previous session. UK Prime Minister Andy Burnham emphasized he would maintain fiscal rules while "utilizing all flexibility clearly allowed within them." Burnham's appointment of former Defense Secretary John Healey, who has Treasury experience, as Chancellor limited downward pressure on the pound. Evelyn Gomez Richter, multi-asset strategist at Mizuho, stated, "His (Minister Healey's) Treasury experience and reputation for consistent message management appear to have helped reassure investors after Monday's fiscal concerns." Francesco Pesole, FX strategist at ING, noted, "The pound needs stability in the bond market to fully recover its strong upward momentum."
The euro-dollar exchange rate rose slightly to $1.14212, up $0.00055 (0.048%) from the previous session. The dollar-yen exchange rate increased to 162.740 yen, up 0.220 yen (0.135%). The offshore dollar-yuan (CNH) exchange rate fell to 6.7661 yuan, down 0.0036 yuan (0.053%).
Analysts Assess Dollar Strength Through 2027
Jimmy Jean, Chief Economist and Strategist at Desjardins, stated, "The dollar's continued weakness appears to be a story for 2027," adding, "We expect the dollar to remain strong over the coming months until the inflation situation becomes clearer." The assessment reflects market expectations that dollar strength will persist in the near term as inflation dynamics remain uncertain.
FAQ
What caused the Dollar Index to rise on July 21?
The Dollar Index (DXY) rose 0.006 points to 100.958 on July 21 due to reports that the Trump administration would impose new tariffs on major trading partners this week, replacing the 10% global tariff expiring July 24, and Yemen Houthi rebels' threats to blockade Saudi Arabian ports.
When does Trump's current 10% global tariff expire?
Trump's 10% global tariff, which was imposed on all countries in February after reciprocal tariffs were invalidated, is set to expire on July 24. The Financial Times reported that new tariffs expected near current 10% levels will be imposed this week to replace the expiring policy.
How did major currency pairs perform against the dollar on July 21?
On July 21, the pound-dollar rate fell to $1.34096 (down 0.190%), the euro-dollar rate rose to $1.14212 (up 0.048%), the dollar-yen rate increased to 162.740 yen (up 0.135%), and the offshore dollar-yuan rate declined to 6.7661 yuan (down 0.053%).
