The US dollar weakened against the Japanese yen on Tuesday, trading at 149.81 yen, a decrease of 0.58% from the previous trading day. Earlier, the dollar had reached a three-week high of 150.94 yen. The decline in the dollar was influenced by a drop in US Treasury yields, while the market remained cautious about the uncertainty surrounding Trump's tariff policies.
On Monday, Trump stated that not all threatened tariffs would be implemented on April 2, and some countries might receive exemptions. This statement had driven the dollar to rebound the previous day but was followed by fluctuations. Monex USA forex trader Helen Given pointed out that Monday's market volatility was mainly triggered by headlines and lacked substantial backing, with global trading patterns leaning towards risk aversion.
Trump's tariff threats have sparked concerns about a slowdown in the US economy and increased inflation, leading to a weaker dollar. However, as the market gradually became optimistic that the tariffs would not be as severe as expected, the dollar stabilized recently. The US services purchasing managers' index (PMI) published by S&P Global showed a stronger-than-expected performance in the services sector, easing some concerns about the US economy shrinking.
Additionally, data released on Tuesday showed that US consumer confidence declined for the fourth consecutive month in March, with household pessimism about the future reaching its highest point in 12 years, further exacerbating market unease.
The euro remained largely unchanged after volatile trading, at 1.0798 dollars, having earlier touched 1.0774 dollars, the lowest level since March 6. German business morale had buoyed the euro, but comments from the French central bank governor about room for rate cuts kept the market cautious about the euro's trajectory.
Meanwhile, the Australian dollar and the British pound both rose by 0.19%, with the latter mainly influenced by expectations surrounding the UK Chancellor's upcoming Spring Statement. Another major focus for traders was the potential peace agreement between Russia and Ukraine. The US reached an accord with Ukraine and Russia for a ceasefire in the Black Sea and a pause in attacks on energy facilities, along with a promise to push for the lifting of some financial sanctions.
