The dollar experienced a broad decline on Tuesday, as concerns mounted over U.S. President Donald Trump's trade deals, which have yet to be finalized. Concurrently, the euro saw gains following the election of Friedrich Merz as chancellor by the German parliament.
Market participants are keenly awaiting specifics regarding trade agreements that the Trump administration claims to be negotiating, particularly with China. Trump suggested that announcements on some deals could be expected within the week.
According to Eugene Epstein, head of structuring for North America at Moneycorp, "The market is getting nervous that we're starting to eat away at the schedule since the 90-day tariff reprieve without anything meaningful being announced." He further noted the prevailing sentiment of unease due to the lack of formal developments.
The dollar's value decreased by 0.86% to 142.445 Japanese yen. Meanwhile, the Taiwanese dollar, which had recently rallied to record levels against the U.S. currency, saw a reduction, dropping 2.6% to 29.931 per dollar amid ongoing market unease over tariffs.
The Canadian dollar experienced an appreciation following Prime Minister Mark Carney's forthright statement to Trump during a White House visit, asserting that Canada would not be for sale. The Canadian currency increased by 0.39% against the U.S. dollar, reaching C$1.38 per dollar.
The euro continued its upward trajectory as Merz secured the necessary votes to assume the role of German chancellor. The euro was last reported up 0.50% at $1.1371.
The U.S. Commerce Department disclosed a 14% increase in the trade deficit, reaching a record $140.5 billion in March, attributed to a rise in imports ahead of potential tariffs.
Against the Swiss franc, the dollar reversed earlier gains, declining 0.09% to 0.82145 franc. Swiss National Bank Chairman Martin Schlegel indicated the bank's readiness to intervene in currency markets and potentially cut interest rates below zero to maintain price stability.
Attention is now on the upcoming Federal Reserve policy meeting, where the central bank is anticipated to maintain current rates. Fed Chairman Jerome Powell is not expected to offer explicit guidance on the bank's response to U.S. import tariffs. Macquarie analysts, led by Thierry Wizman, cautioned against expecting a "signal of overt 'dovishness'" from the Fed.
The Bank of England is anticipated to reduce interest rates by a quarter point on Thursday, with the British pound gaining 0.61% to $1.33780.
Source: Reuters