SINGAPORE- The dollar wobbled on Tuesday after a bruising quarter as weary investors braced for reciprocal tariffs from US President Donald Trump this week, a move that is likely to exacerbate the global trade war that has evoked US recession worries.
Investors’ focus has been firmly on the new round of reciprocal levies that the White House is due to announce on Wednesday, with details scarce. Trump said late on Sunday that essentially all countries will be slapped with duties this week.
That has left currency markets subdued as traders stayed on the sidelines awaiting clarity on Trump’s trade policies. Trump has already imposed tariffs on aluminum, steel and autos, along with increased tariffs on all goods from China.
“The second quarter may bring with it as much uncertainty and volatility for investors as the first quarter of the year,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial.
“To date, there has been very little clarity on what and who these tariffs will target out of the gate. Market volatility could escalate depending on what and who is targeted.”
The euro was 0.11 percent lower at $1.0805 after gaining 4.5 percent in the first quarter of the year, its strongest quarterly performance since October-December in 2022, thanks mainly to Germany’s fiscal overhaul, although some investors are skeptical of the bull run lasting longer.
The Japanese yen was a shade stronger at 149.815 per dollar on Tuesday. The yen rose nearly 5 percent against the dollar in the January-March period on growing bets that the Bank of Japan would hike interest rates again.
Data on Tuesday showed business sentiment among big Japanese manufacturers worsened in the three months to March, a sign escalating trade tensions were already taking a toll on the export-reliant economy and complicating the BOJ’s next move.
