USD Strengthens as Trump Orders Up to 100% Tariffs on Drone Imports

The US dollar is seeing supportive flows during the Asia-Pacific session as President Trump announced new tariffs of up to 100% on drone imports, escalating trade tensions and boosting safe-haven demand for the greenback. Oil prices edged marginally higher on the news, reflecting concerns over potential supply chain disruptions and geopolitical risk premiums. The tariff announcement adds to an already protectionist trade agenda, which has historically supported USD strength against risk-sensitive currencies such as AUD and NZD, while weighing on commodity-linked pairs. The broader Asia-Pacific session saw muted price action, with markets digesting the implications of the latest trade policy escalation. Traders should monitor USD/CNH and AUD/USD for potential volatility as retaliatory measures from affected trading partners could materialize. Near-term, the dollar index may find support from sustained risk aversion, though prolonged trade conflicts could introduce stagflationary pressures that complicate the Federal Reserve's policy outlook. Key resistance for the DXY sits near recent highs, while commodity currencies face downside risk on deteriorating trade sentiment.