Dollar retreats on signs Trump tariffs to be measured
SYDNEY — The dollar nursed broad losses on Tuesday after U.S. President Donald Trump stopped short of imposing new tariffs and reports suggested any new taxes would be imposed in a “measured” way, a major relief for trade-exposed currencies.
Trump used his inauguration speech to announce emergencies on immigration and energy and a more expansionist foreign policy, including a pledge to take back the Panama Canal.
ADVERTISING
Yet there was only a brief mention of tariffs and, so far, no details on how or when they might be unrolled.
“It doesn’t mean tariffs won’t be imposed, but it has been taken as an indication towards gradualism and against universality,” said Taylor Nugent, a senior markets economist at National Australia Bank.
The reaction in markets was swift, with the dollar index falling 1.2% on Monday in the sharpest daily loss since late 2023. The index last stood at 108.060, just above support around 107.70.
The euro was up at $1.0416, having rallied 1.4% overnight to test resistance at $1.0435. The EU runs a sizable trade surplus with the United States and was seen as a major target for Trump’s tariffs.
Likewise, Trump had threatened China with tariffs of up to 60% so the absence of any hard numbers on Monday saw the dollar dive 1.0% to 7.2642 yuan in offshore trade.