The dollar edged lower on Tuesday, retreating from a near three-week high after an earlier rise, as currency markets remained volatile amid ongoing uncertainty over tariffs.
The shift came after U.S. President Donald Trump indicated that not all of his proposed tariffs would take effect on April 2, with some countries potentially receiving exemptions. The comments helped boost sentiment on Wall Street, easing concerns about a possible slowdown in U.S. economic growth.
Stronger-than-expected services data from S&P Global’s U.S. PMI report and a renewed rally in Wall Street stocks initially pushed up U.S. bond yields, lending support to the dollar. However, the currency later lost momentum in European trading, with the U.S. dollar index slipping 0.22% to 104.07, after touching 104.46, its highest level since early March.
The euro rebounded after touching a three-week low, climbing 0.16% to $1.0817. The dollar also lost ground against the Japanese yen, dropping 0.4% to 150.09 after briefly rising above 150 overnight.
Earlier in the session, it had touched a three-week high of 150.92 yen. Investors are closely watching the Bank of Japan’s monetary policy approach, with minutes from its January meeting revealing discussions on the pace of future interest rate hikes. While the central bank left interest rates unchanged last week and flagged global economic uncertainties, expectations remain that a rate hike could come in the third quarter of the year.
The Australian dollar gained 0.51% to $0.6319 after the government announced tax cuts and cost-of-living measures aimed at bolstering consumer confidence. Meanwhile, the British pound strengthened 0.22% to $1.2951 as markets looked ahead to the UK government’s fiscal update on Wednesday, where spending cuts are expected to align with fiscal targets.
Bitcoin surged to a two-week high of $88,771 overnight before retreating slightly to trade around $87,209.
