The dollar struggled to recover against major currencies on Wednesday, staying close to two-week lows as markets await clarity on President Donald Trump’s plans for tariffs.
Trump said on Tuesday that his administration is considering a 10% tariff on goods imported from China starting on February 1. He also mentioned that Mexico and Canada might face tariffs of around 25%, though he did not provide further details.
He added that tariffs on European imports are also under discussion.
Despite these statements, the lack of specific plans led to a 1.2% drop in the dollar at the start of the week against a basket of major currencies. On Tuesday, the dollar stabilized and ended flat after a rebound attempt failed, with U.S. officials stating that any new taxes would be introduced cautiously.
The dollar index, which tracks the U.S. currency against six major rivals, fell 0.1% to 108 on Wednesday, near the two-week low of 107.86 reached on Tuesday.
The euro remained steady at $1.0428, close to the two-week high reached on Tuesday. Sterling slipped slightly to $1.235 after reaching a 1-1/2 week high in the previous session.
The Canadian dollar held steady at 1.4326 per U.S. dollar, following a volatile week where it briefly fell to 1.4520, its lowest since March 2020, under pressure from weaker inflation data.
The Mexican peso increased by about 0.19% to 20.572 per dollar. China’s yuan weakened slightly to 7.275 per dollar in offshore trading, after hitting its strongest level since December 11 at 7.2530 on Tuesday.
On Monday, Trump signed a trade memorandum, directing federal agencies to review trade issues by April 1. The dollar gained 0.13% to 155.715 yen, slightly recovering from the one-month low it hit the previous day.
