The U.S. dollar lost momentum on Tuesday, retreating from a near three-week high as uncertainty over tariffs weighed on currency markets. After an early rise, the dollar weakened against major currencies, including the Japanese yen and euro, as traders reacted to shifting global economic signals.
Tariff Concerns Shake Markets
The dollar initially gained strength after strong U.S. economic data, but comments from former President Donald Trump led to a reversal. Trump suggested that not all proposed tariffs would take effect on April 2, and some countries might receive exemptions. This eased investor fears about a potential economic slowdown, boosting sentiment on Wall Street but weakening the dollar’s position.
Dollar Index Retreats After Early Gains
The U.S. dollar index, which tracks the currency against six major counterparts, slipped 0.22% to 104.07. Earlier in the session, it had reached 104.46, its highest level since early March.
Meanwhile, the euro rebounded after touching a three-week low. It gained 0.16% to trade at $1.0817, recovering from earlier losses.
Read:Â PSX Plunges Amid Cement Sector Woes and IMF Tax Dispute
Yen Strengthens as Investors Watch BOJ Moves
The dollar weakened against the yen, dropping 0.4% to 150.09 after briefly rising above 150 overnight. Earlier, it had touched a three-week high of 150.92 yen.
Investors are closely watching the Bank of Japan’s (BOJ) monetary policy. Minutes from its January meeting revealed discussions on the pace of future interest rate hikes. Although the BOJ left rates unchanged last week, analysts expect a rate increase in the third quarter of the year. The uncertainty surrounding Japan’s monetary policy added pressure on the dollar.
Commodity Currencies and British Pound Gain
The Australian dollar climbed 0.51% to $0.6319, supported by new government tax cuts and cost-of-living measures aimed at boosting consumer confidence.
Meanwhile, the British pound strengthened 0.22% to $1.2951. Investors are awaiting the UK government’s fiscal update on Wednesday, where spending cuts are expected to align with fiscal targets.
Bitcoin Surges Before Slight Pullback
Bitcoin saw a strong rally, reaching a two-week high of $88,771 overnight before pulling back slightly to $87,209. The cryptocurrency market continues to experience volatility amid shifting investor sentiment.
Outlook for the Dollar
With tariff uncertainty, global economic concerns, and central bank policies influencing currency movements, traders remain cautious. The dollar’s future trajectory will depend on U.S. economic data, Federal Reserve decisions, and global trade developments. For now, the greenback faces increased volatility as markets navigate economic shifts.
Follow us on Google News, Instagram, YouTube, Facebook,Whats App, and TikTok for latest updates
