Dollar edges lower amid tariffs uncertainty; euro gains By Investing.com

Euro US Dollar0.05%British Pound US Dollar0.02%US Dollar Japanese Yen-0.16%US Dollar Turkish Lira0.11%US Dollar Chinese Yuan0.00%

Investing.com - The Relatively good foreign exchange dealersU.S. dollar edged lower Monday, drifting off recent highs amid uncertainty over the Trump administration’s tariff policies, while the euro bounced on solid regional activity data.

At 05:10 ET (09:10 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower to 103.640, after posting a three-week high on Friday.

The index rose 0.4% last week, its first week of gains this month.

Dollar slips amid tariffs uncertainty 

The dollar has been under pressure for most of this year, hurt by worries that U.S. President Donald Trump’s trade policies could hit economic activity, as well as trigger fresh inflationary pressures.

The next round of tariffs is due on April 2, when the White House is scheduled to announce reciprocal levies on many countries, but reports have suggested that President Trump is planning a narrower, more targeted agenda.

Trump is now expected to not impose industry-specific tariffs next week, and will instead apply reciprocal duties only on a targeted set of countries that account for a bulk of the U.S.’ foreign trade, reports from both Bloomberg and the Wall Street Journal said, on Sunday. 

Euro gains after solid German PMI data

In Europe, EUR/USD traded 0.2% higher at 1.0839, bouncing off Friday’s nearly three-week low as traders handed back some of the previous week’s gains generated by the optimism surrounding Germany’s move to loosen fiscal constraints in order to boost military and infrastructure spending.

Data released earlier Monday showed that business activity in Germany’s private sector rose at the quickest rate for ten months in March, amid a first increase in manufacturing production for almost two years.

The HCOB German flash composite Purchasing Managers’ Index, compiled by S&P Global, rose to 50.9 in March from 50.4 in February, its highest since May last year and above the 50.0 threshold that separates growth from contraction.

There was less good news from France, as private sector activity in the eurozone’s second largest economy  contracted for a seventh consecutive month in March.

GBP/USD rose 0.3% to 1.2953, ahead of the release of the latest U.K. economic activity data, in the wake of the Bank of England keeping its key interest rate unchanged last week.

USD/TRY rose 1.5% to 37.947, with the Turkish lira slumping after a Turkish court on Sunday jailed Istanbul Mayor Ekrem Imamoglu, President Tayyip Erdogan’s main political rival, pending trial on corruption charges.

Imamoglu has denied the charges, and called for nationwide protests on Sunday. 

Yen weakens on manufacturing PMI 

In Asia, USD/JPY traded 0.2% higher to 149.60, after data showed that Japan’s factory activity declined at the fastest pace in a year in March, with the au Jibun Bank manufacturing PMI dropping to 48.3 from February’s 49.0. 

Speaking in parliament, Bank of Japan Governor Kazuo Ueda stated on Monday that the central bank remains committed to raising interest rates if core inflation moves closer to its 2% target, regardless of potential losses on its government bond portfolio. 

USD/CNY edged 0.1% higher to 7.2539, amid caution following reports that President Donald Trump plans to implement a more selective approach to reciprocal tariffs starting April 2.