US dollar rebounds against safe-haven currencies after Trump pauses tariffs
The U.S. dollar rebounded against safe-haven currencies including the yen and Swiss franc on Wednesday after President Donald Trump announced a 90-day pause on many new tariffs on trading partners, but escalated a confrontation with Beijing by hiking duties on Chinese goods.
Trump said he had authorized a 90-day pause in "reciprocal" 10% tariffs but was also raising the tariff rate for China to 125%, effective immediately.
The dollar had been weakening against its peers earlier in the session after Trump's "reciprocal" tariffs on dozens of countries took effect on Wednesday, including massive 104% duties on Chinese goods.
China had swiftly retaliated with an 84% tariff on U.S. goods from Thursday, while EU countries also approved on Wednesday the bloc's first countermeasures against U.S. tariffs.
Benchmark 10-year Treasury yields pared gains after the Treasury saw strong demand for a $39 billion sale of the notes on Wednesday. The yield on benchmark U.S. 10-year notes rose 13.6 basis points to 4.392%.
The greenback rose 1.2% against the safe-haven yen to 148.80, reversing losses in early session trade. It gained 1.14% versus the Swiss franc to 0.8569 franc.
U.S. Treasury Secretary Scott Bessent reiterated in a Fox News interview that the U.S. still has a strong dollar policy.
German conservatives under Friedrich Merz agreed a coalition deal with the centre-left Social Democrats on Wednesday, helping to support the euro.
The single currency firmed 0.11% to $1.09685 , creeping back towards last week's peak at $1.1147.
The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, rebounded from early session losses. It was up 0.11% to 102.88.
The People's Bank of China will not allow sharp yuan declines and has asked major state-owned banks to reduce U.S. dollar purchases, people with direct knowledge of the matter told Reuters on Wednesday.
The dollar was down 1.01% versus the yuan offshore to 7.349 yuan , after reaching an all-time high at 7.4292.
Source : Reuters
