USD gains as trade tensions resurface ahead of Powell speech

The US dollar has strengthened 0.4% across major pairs as renewed trade war concerns and upcoming Q3 earnings season drive safe-haven flows. EUR/USD dropped 0.35% to 1.0520, while GBP/USD fell 0.4% to 1.2680 as risk sentiment deteriorated following reports of potential new tariff discussions. Markets are particularly focused on Federal Reserve Chair Powell's scheduled speech later today, with traders seeking clarity on the central bank's rate trajectory amid mixed economic signals. S&P 500 futures declined 0.8%, reflecting broader risk-off sentiment that typically supports the dollar. The DXY index pushed above 106.50, testing resistance at the 50-day moving average. Key support for EUR/USD sits at 1.0500, while resistance remains firm at 1.0550. Traders should prepare for increased volatility around Powell's remarks, particularly any comments on inflation persistence or labor market conditions.