Dollar dips towards one-week low as market ponders proposed Trump tariffs
The U.S. dollar eased towards a one-week low versus major peers on Tuesday as traders considered whether President-elect Donald Trump's proposed tariffs would be less aggressive than promised.
On Monday, the greenback slid against the euro and sterling following a report in the Washington Post that Trump's aides were exploring plans that would apply tariffs only on sectors seen as critical to U.S. national security.
However, the currency made up some ground after Trump denied the report in a post on his Truth Social platform.
The U.S. dollar index, which gauges the currency against the euro, sterling and four other rivals, eased 0.25% to 108.03 as of 0730 GMT, after dropping to as low as 107.74 overnight, its weakest since Dec. 30.
On Jan. 2, the index pushed to as high as 109.58 for the first time since November 2022, largely due to expectations that Trump's promised fiscal stimulus, reduced regulation and higher tariffs would boost U.S. growth.
The focus will also be on U.S. JOLTS job opening data and the ISM Services index for December later in the session.
The euro zone has been a particular target of Trump's tariff threats, and the euro added 0.16% to $1.0407, after jumping to a one-week high of $1.0437 on Monday.
Sterling was up 0.14% at $1.25395, following its climb to as high as $1.2550 in the prior session.
However, the dollar gained 0.09% to reach 157.46 yen, and earlier rose as high as 158.425 yen for the first time since July 17, drawing support from higher U.S. Treasury yields.
The yen may have also been sold as investors adjusted positions at the start of the new year, said Shinichiro Kadota, a currency strategist at Barclays, who forecasts the dollar to be at 158 yen at end-March.
The risk-sensitive Australian and New Zealand dollars resumed their climbs, with the Aussie up 0.46% at $0.6275 and the kiwi up 0.66% at $0.5681.
Source: Reuters
