Market Brief: Dollar Softens Amid Nvidia Surge and Tariff Shifts The U.S. dollar is trading under pressure following a wave of risk-on sentiment triggered by stellar corporate performance and shifting trade policy. The U.S. Dollar Index (DXY) recently stabilized near **97.98**, reflecting a modest **0.10%** intraday recovery after a period of consolidation. While the index has gained roughly **0.87%** over the past month, it remains down more than **8%** over the last year. Market confidence received a significant boost from Nvidia’s fourth-quarter fiscal **2026** results. The chipmaker reported earnings of **$1.62** per share on revenue of **$68.1 billion**, marking a **73.2%** year-over-year increase. This outperformance, particularly in the data center segment which surged **75.1%** to **$62.3 billion**, has anchored a broader "risk-on" mood across global equities. Trade Policy and Tariffs Trade uncertainty continues to influence currency flows. Following a Supreme Court ruling that struck down previous IEEPA-based tariffs, the administration acted quickly to implement a new **10%** baseline import duty under Section 122 of the **1974** Trade Act. This measure, which went into effect on February **24**, **2026**, is slated to last for **150** days. While there are threats to raise this rate to **15%**, the official directive is currently pending. The global average effective tariff rate stood at **13.7%** as of February, primarily affecting metals, computers, and vehicles. Currency Dynamics and the Yen The Japanese yen has experienced volatile trading. After strengthening earlier in the month to lows near **152.27**, the **USD/JPY** pair has rebounded to approximately **155.91**. This reversal comes despite hawkish signals from the Bank of Japan (BoJ). Governor Kazuo Ueda reaffirmed the bank's stance to continue raising interest rates if economic forecasts materialize. Markets are currently pricing in a **70%** to **74%** probability of a rate hike by April **2026**. However, comments from Prime Minister Sanae Takaichi expressing reservations about rapid tightening have tempered recent yen gains. Outlook and Indicators Federal Reserve officials remain cautious. While lower tariffs could theoretically ease inflation, the Fed is not expected to rush into rate cuts. Current market pricing suggests the next reduction may not occur until July. Investors are now focusing on upcoming labor market data and the March FOMC meeting to determine the next leg for the greenback. In the near term, the dollar is expected to maintain its consolidation phase as markets digest the interplay between robust tech earnings and evolving U.S. trade mandates.