The dollar index weakened below 98.5 on Thursday, approaching its lowest levels since early 2022, following renewed tariff threats from President Donald Trump. Trump announced plans to send formal letters to key trading partners within the next one to two weeks, outlining unilateral tariffs intended to pressure countries into trade agreements. Despite the tough rhetoric, US Treasury Secretary Scott Bessent signaled a potential extension of the current 90-day pause on reciprocal tariffs for countries showing “good faith” in ongoing trade talks. The dollar has faced sustained selling pressure this year as trade policy uncertainty continues to erode investor confidence in US assets. Additional downward momentum came from a softer-than-expected CPI reading for May, which raised market expectations for a potential Federal Reserve rate cut as soon as September. All eyes are now on Thursday’s PPI release for further clues on the inflation outlook and monetary policy trajectory.