[LONDON] The US dollar fell slightly from an almost three-week high on Tuesday (Mar 25) after rising earlier in the session as currencies continued to waver on the back of uncertainty about tariffs.
US President Donald Trump said not all of his threatened levies would be imposed on Apr 2 and some countries might get breaks, which helped the mood on Wall Street overnight by soothing some fears about a possible slowdown in US growth.
A strong services component in S&P Global’s flash US PMI figures on Monday alongside a rotation back into Wall Street stocks helped push up US bond yields, which supported the dollar.
Yet the US dollar index gave up its gains in European trading and was last down 0.22 per cent to 104.07, having earlier reached 104.46, the highest since Mar 5.
Meanwhile, the euro reversed an earlier fall to a three-week low and was last up 0.16 per cent at US$1.0817.
Brent Donnelly, president of analytics firm Spectra Markets, said uncertainty remains high.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
“The EUR/USD trade has petered out, as have the massive move in rate differentials and relative equity performance,” he said.
“The view that tariffs are unambiguously bullish (for the) US dollar has been challenged by the price action in 2025, and so even when we get the information on what tariffs look like next week, it will be hard to know what we are supposed to do.”
The dollar has rebounded somewhat after falling to a five-month low in mid-March as Trump’s stop-start tariff campaigns dented company and investor confidence and darkened the outlook for US growth.
The dollar fell 0.4 per cent to 150.09 Japanese yen, having pulled overnight above 150. It rose to a three-week high of 150.92 yen in the Asia morning.
Investors expect the Bank of Japan to go slow on monetary tightening that could bolster the yen. Minutes of the BOJ’s January meeting released on Tuesday showed policymakers discussed the pace of raising interest rates.
Last week, the BOJ kept interest rates steady and warned of heightening global economic uncertainty. But many analysts still expect the BOJ’s next move to come in the third quarter, most likely in July.
The Australian dollar climbed after the government launched fresh tax cuts on Tuesday and announced other cost-of-living relief in a major push to win back disgruntled voters. It was last up 0.51 per cent at US$0.6319.
Sterling rose 0.22 per cent to US$1.2951 as traders looked towards Wednesday’s spring statement, in which British finance minister Rachel Reeves is expected to cut government spending to meet fiscal rules.
Bitcoin hit a two-week high of US$88,771 overnight but was last 0.8 per cent lower around US$87,209. REUTERS
