Trump's tariff threat on China sinks dollar

Group 1 - The dollar declined after President Trump threatened to increase tariffs on China, raising concerns about the trade war's impact on the U.S. economy [1] - The dollar index fell by 0.4% to 98.99, but is still on track for a weekly gain of 1.66%, the largest since September 2024 [2] - The euro and yen strengthened against the dollar, while commodity-linked currencies like the Australian dollar weakened [2] Group 2 - Traders are monitoring the potential reopening of the U.S. federal government and upcoming economic data that could influence Federal Reserve policy [3] - The U.S. Bureau of Labor Statistics plans to release September's consumer inflation report on October 24, which is crucial for determining the cost-of-living adjustment for 2026 [3] - There is a 97% probability that the Federal Reserve will cut rates by 25 basis points at its October meeting, with a 92% chance of an additional cut in December [4] Group 3 - The Japanese yen weakened due to concerns that the Bank of Japan may not raise interest rates this year following a political shift [5] - Japanese Finance Minister expressed worries about excessive volatility in the foreign exchange market, indicating potential government intervention [6]