USD rebounds 0.2% on hawkish FOMC minutes despite tariff ruling setback

The US dollar has staged a modest recovery, with the DXY index climbing 0.2% to 104.70, as traders balance bearish tariff court ruling implications against hawkish Federal Reserve policy signals. FOMC meeting minutes revealed committee members' concerns about persistent inflation, suggesting the central bank may maintain higher rates for longer than previously anticipated. EUR/USD retreated from session highs to 1.0865, while USD/JPY recovered to 155.30. The conflicting signals from trade policy uncertainty and monetary policy firmness have created a tug-of-war in dollar valuation. Markets are pricing in a 65% probability of rates remaining unchanged at the next Fed meeting, up from 45% last week. Near-term dollar direction will likely depend on upcoming US economic data, particularly Friday's PCE inflation figures. Technical analysis shows the dollar index finding support at 104.50, with resistance at 105.00.