TOKYO- The US dollar eased towards a one-week low versus major peers on Tuesday as traders considered whether President-elect Donald Trump’s tariffs would be less aggressive than promised.
On Monday, the greenback slid against the likes of the euro and sterling following a report in the Washington Post that Trump’s aides were exploring plans that would apply tariffs only on sectors seen as critical to US national or economic security.
However, the currency made up some of the ground after Trump denied the report in a post on his Truth Social platform.
The US dollar index which gauges the currency against the euro, sterling and four other rivals, eased 0.14 percent to 108.16 as of 0600 GMT, after dropping to as low as 107.74 overnight, its weakest since Dec. 30.
On Jan. 2, the index pushed to as high as 109.58 for the first time since November 2022, largely due to expectations that Trump’s promised fiscal stimulus, reduced regulation and higher tariffs would boost US growth.
“His (Trump’s) 10-20 percent universal tariffs were always seen as unlikely to eventuate in such stringent form – so the reporting from the Washington Post has cemented this widely held view, even if Trump has played it down,” said Chris Weston, head of research at Pepperstone.
“Clearly, the last thing Trump wants at this point is to lose his leverage and credibility going into negotiations … even if the WaPo reporting becomes the reality over time.”
The euro zone has been a particular target of Trump’s tariff threats, and the euro added 0.08 percent to $1.039825, after jumping to a one-week high of $1.0437 on Monday.
Sterling was up 0.14 percent at $1.25395, following its climb to as high as $1.2550 in the prior session.
However, the dollar gained 0.14 percent to reach 157.83 yen, and earlier rose as high as 158.425 yen for the first time since July 17, drawing support from higher US Treasury yields.
