Dollar Slips Close to 4-Month Low as Tariff Uncertainty and Growth Fears Weigh
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The U.S. dollar remained near a four-month low on Friday, as fluctuating tariff policies heightened uncertainty and raised concerns about the growth prospects of the world's largest economy. This left investors awaiting U.S. jobs data, which was due later in the day.
Despite a temporary suspension of tariffs on Mexico and Canada announced by U.S. President Donald Trump on Thursday, the markets remained jittery. This kept the safe-haven yen close to its strongest position against the dollar since early October, while the Swiss franc reached a three-month high of 0.8814. The greenback also weakened against the Canadian dollar and Mexican peso following the announcement.
Trump's tariff exemption is set to expire on April 2, at which point he intends to impose reciprocal tariffs on all U.S. trading partners.
After mixed U.S. economic data earlier in the week, market attention shifted to Friday's nonfarm payrolls report, as investors try to gauge whether the economy is slowing down. Some analysts believe that the dollar’s appeal has waned amid rising uncertainty, with the impact of tariffs no longer enough to support it.
Economists surveyed by Reuters expect the U.S. economy to have added 160,000 jobs in February, up from 143,000 in January, while the unemployment rate is expected to remain steady at 4.0%. Federal Reserve Chairman Jerome Powell will address the economic outlook later in the day, following the jobs report. Currently, the market has priced in three Fed rate cuts for the remainder of the year.
In Europe, the euro rose 0.27% to $1.0815, after strengthening to its highest point in four months the previous session, supported by a hawkish ECB rate cut and surging European bond yields driven by Germany’s significant spending proposal. The euro was on track for its largest weekly gain since March 2009, up more than 4%.
The U.S. dollar index slipped 0.21% to 103.97, while the British pound remained flat at $1.28875. Against the yen, the dollar fell 0.33% to 147.49 yen.
In Japan, the largest labor union group is pushing for the largest salary increase in over 30 years, boosting expectations that the Bank of Japan may raise interest rates. The country's economy minister, Ryosei Akazawa, also stated that Japan has met the threshold to officially declare an end to long-term price deflation.
In other Asian markets, the offshore yuan remained steady at 7.2441, though China’s export growth slowed in January and February, with imports unexpectedly contracting due to escalating trade tensions with the U.S.
The Australian dollar fell 0.48% to $0.6302, after hitting its highest level since February 24 on Thursday.
In cryptocurrency markets, Bitcoin dipped following news that Trump had signed an executive order to create a strategic Bitcoin reserve, which would be capitalized by Bitcoin from criminal or civil asset forfeitures. Bitcoin’s price dropped 1.45% to $88,178.66 after initially paring losses. Analysts noted that market sentiment had already factored in such news, leading to a tepid market reaction.
Paraphrasing text from "Reuters" all rights reserved by the original author
