The U.S. dollar slipped against major global currencies on Thursday as investors awaited retail sales data to assess consumer resilience amid ongoing tariff concerns, while enthusiasm over the recent China-U.S. trade pause began to fade.
The dollar, which had gained earlier in the week following the announcement of a 90-day halt on new tariffs between the two countries, has since lost momentum. Market sentiment suggests that initial optimism surrounding the trade truce has waned.
Safe-haven currencies strengthened, with the Japanese yen appreciating 0.6% to 145.94 per dollar and the Swiss franc gaining 0.5% to 0.8384. The euro also edged up 0.2% to $1.1192. In Asia, several currencies appreciated against the dollar, led by the South Korean won, which rose 0.8% to 1,396.15 per dollar for a second consecutive day.
This move followed reports of recent discussions between South Korean and U.S. officials on the exchange rate, prompting dollar selling. The Taiwan dollar also advanced 0.6% against the greenback.
While reports indicated that the U.S. is not actively pursuing a weaker dollar as part of tariff negotiations, the dollar index dipped 0.1% to 100.85, though it is on track for a modest weekly gain of 0.4%. Despite this, the index has declined nearly 7% so far in 2025.
Investor confidence in the dollar remains fragile, influenced by uncertainties around U.S. trade policies and fiscal concerns. The U.S. equity markets have recovered losses from April, but foreign exchange markets have yet to reflect renewed confidence in the dollar.
Treasury yields remain elevated, with the 10-year yield hovering near a one-month high, reflecting concerns over rising federal debt levels due to recent budget proposals.
Retail sales data from the U.S. is expected to offer further insight into the strength of consumer spending, which has so far appeared resilient despite weak sentiment and the introduction of new tariffs last month. Meanwhile, sterling rose 0.2% to $1.328 following data showing unexpected economic growth in the UK during March.
