TOKYO- The US dollar steadied against major peers on Wednesday as investors continued to take stock of President-elect Donald Trump’s tariff pledges, while keeping an eye on a key inflation figure out of the US later in the day.
The New Zealand dollar rose after the Reserve Bank of New Zealand cut benchmark rates by 50 basis points to 4.25 percent while noting that inflation had declined to near the mid-point of its targeted range.
Trump’s vows on Monday of big tariffs on Canada, Mexico and China, the United States’ three largest trading partners, have left investors jittery, even if some of the reaction was tempered later in the US day.
“Markets are likely to remain edgy as a second Trump administration brings back uncertainty about policy making in the US“ said Carol Kong, currency strategist at Commonwealth Bank of Australia.
“This uncertainty can lead markets to ‘sell first and ask questions later’ which is a positive for the USD.”
The dollar was last little changed versus its Canadian counterpart at C$1.4052 below Tuesday’s 4-1/2-year high of C$1.4178.
The dollar remained off Tuesday peak against the Mexican peso, after touching its highest since July 2022 in the previous session
The US currency also rose to its highest level since July 30 against China’s yuan on Tuesday.
A ceasefire between Israel and Iran-backed group Hezbollah will take effect on Wednesday after both sides accepted an agreement brokered by the United States and France, US President Joe Biden said on Tuesday. The Israeli shekel hit a three-month high on Tuesday. The yen meanwhile, held onto gains made from safe-haven bids amid the turmoil. The dollar was last down 0.19 percent at a two-week low of 152.81 yen.
