Tariff Tensions and Currency Fluctuations: A Dollar’s Struggle

The U.S. dollar continued to show signs of strength on Thursday, despite looming uncertainties from President Donald Trump’s proposed tariffs on European, Canadian, and Mexican goods. The euro retreated from a recent peak, while mixed signals from the U.S. administration kept investors cautious.

In response to Trump’s Wednesday comments suggesting a 25% tariff on European cars, traders took a cautious stance, as U.S. trade relations remain complex. The Canadian dollar held steady near a two-week low, and the Mexican peso stayed largely unchanged, while economic analysts expressed concern over U.S. growth and inflation rates.

The currency markets remained jittery as global trade tensions elevated the dollar index, though it was still 4% below January’s peak. Anticipation grows around potential Federal Reserve rate cuts, with focus shifting to hard data versus sentiment projections to assess the economy’s trajectory in light of these developments.

(With inputs from agencies.)