The U.S. dollar continued its downward trajectory on Wednesday, declining broadly against major currencies as market concerns intensified over fresh U.S. tariff measures.
The Swiss franc and the euro led the gains, with the franc climbing 0.7% to 0.8175, hovering near its 10-year high reached last Friday. The dollar also lost 0.4% against the Japanese yen, trading at 142.69, after briefly touching a seven-month low during the session.
The renewed selloff was sparked by the U.S. government’s decision to tighten restrictions on chip exports to China, along with President Donald Trump’s announcement of a new probe into potential tariffs on critical minerals. These moves have added to the uncertainty that has weighed on investor confidence in recent weeks, following a series of unpredictable tariff threats and reversals.
The Swiss franc’s rise has been particularly notable, outperforming all G10 currencies since the initial tariff announcements on April 2. The currency’s appreciation, fueled by its safe-haven status and a broader shift toward European assets, has raised speculation about the Swiss National Bank’s possible response.
However, concerns about potential U.S. backlash may limit direct intervention by Swiss authorities.
Meanwhile, the euro extended its recent rally, gaining 0.7% to reach $1.1356. The common currency has appreciated roughly 5% since the onset of the tariff tensions, as European investors have scaled back exposure to U.S. assets.
Although the euro saw minor pullbacks earlier this week, it remains near its three-year high of $1.1474.
In Japan, currency markets are closely monitoring bilateral talks between Japan’s economy minister Ryosei Akazawa and U.S. Treasury Secretary Scott Bessent, amid speculation the two sides might agree on policies that could lead to a stronger yen.
The market remains vulnerable to any sign that these discussions may falter, given the substantial build-up in yen positions.
Other currencies also made headway against the dollar. The Canadian dollar gained 0.3% to C$1.3916, up 4% so far in April. The loonie’s strength reflects investor concern over U.S. economic instability and erratic policy decisions.
The Bank of Canada’s upcoming policy decision has left markets uncertain, with a 40% chance priced in for a rate cut.
The British pound rose 0.28% to $1.327, brushing off softer-than-expected inflation data and touching a six-month high of $1.3292 earlier in the session. In the Asia-Pacific region, the Australian and New Zealand dollars maintained recent strength.
The Aussie was last seen at $0.637 and the kiwi at $0.5913, holding close to last week’s highs—their strongest weekly performance since 2020.
In China, the yuan remained relatively steady. The onshore yuan was at 7.3064 per dollar, while the offshore rate improved by 0.29% to 7.3080. Despite robust first-quarter economic indicators, markets showed little immediate reaction.
The Chinese authorities have allowed only slight adjustments to the yuan’s trading band, even as tariffs affecting Chinese exports have surged beyond 100%.
