Written by Kevin Buckland
TOKYO (Reuters) – The U.S. dollar fell to a one-week low against major peers on Tuesday as traders weighed whether President-elect Donald Trump’s tariffs could be more aggressive than promised.
On Monday, the greenback slipped against the likes of the euro and sterling following a report in the Washington Post that Trump aides were exploring plans to impose tariffs on sectors deemed vital to US national security or the economy.
However, this money formed some of the reasons after Trump rejected the report on his Truth Social platform post.
The , which measures the currency against the euro, sterling and four other rivals, fell 0.14% to 108.16 as of 0600 GMT, after falling to 107.74 overnight, the weakest since December 30.
On Jan. 2, the index rose to a high of 109.58 for the first time since November 2022, largely due to expectations that Trump’s promised fiscal stimulus, reduced regulations and higher taxes will boost US growth.
“His (Trump’s) 10-20% global spending has always seemed unlikely to materialize – so a report from the Washington Post has reinforced this widely held view, even if Trump played it down,” said Chris Weston. head of research at Pepperstone.
“Obviously, the last thing Trump wants at this point is to lose his power and credibility in the negotiations … even if WaPo’s reporting turns out to be true in the long run.”
The euro area has been a particular target of Trump’s tariff threats, and the euro added 0.08% to $1.039825, after jumping to a one-week high of $1.0437 on Monday.
Sterling was up 0.14% at $1.25395, following its high of $1.2550 in the previous session.
However, the dollar gained 0.14% to 157.83 yen, and earlier rose to 158.425 yen for the first time since July 17, receiving support from higher US Treasury yields.
The yen is also likely to sell off as investors adjust positions ahead of the new year, said Shinichiro Kadota, a currency strategist at the firm. Barclays (LON:), which predicts the dollar will be at 158 yen by the end of March.
The more risk-sensitive Australian and New Zealand dollars resumed their gains, up 0.35% to $0.6268 and up 0.47% to $0.5670.
In cryptocurrency, bitcoin was little changed at around $101,688, trading at its highest level since December 19th.
