Bruised Dollar Slides Amid Tariff Confusion; Euro, Yen Strengthen

Dollar Drops as Markets React to Tariff Confusion and Global Currency Shifts

The U.S. dollar slipped on Monday as investor sentiment soured following a series of mixed messages on tariffs from President Donald Trump. This uncertainty led traders to shift focus to safer currencies like the euro and Japanese yen.

Markets have been rattled by Trump’s sudden moves—first imposing, then delaying tariffs on several imports, including semiconductors. These contradictory announcements have created confusion, leaving investors on edge. “Markets are trading uncertainty right now,” said Nick Rees, head of macro research at Monex Europe. “The inconsistent messages from the U.S. administration have tilted the risk toward further dollar weakness.” The euro climbed 0.2% to $1.139, close to its recent three-year high, as investors abandoned the dollar for more stable alternatives.

The British pound also rose 0.3% to $1.317, and the New Zealand dollar touched a four-month high at $0.5888. The Australian dollar extended last week’s rally with a 0.7% gain to $0.63395. Meanwhile, the dollar slipped 0.4% to 142.91 yen as Japan prepared for key trade talks with the U.S., likely to include currency policy. Market participants speculated on potential discussions between Japan's Finance Minister Katsunobu Kato and U.S. Treasury Secretary Scott Bessent regarding the yen’s valuation. Against the Swiss franc, the dollar remained steady at 0.8169.

The greenback also remained weak overall, with the dollar index hovering near a three-year low at 99.36. A recent sharp sell-off in the U.S. Treasury market has added pressure on the dollar. The 10-year yield held at 4.46% after last week’s historic spike in borrowing costs due to unwinding hedge fund trades. In Asia, the Chinese yuan showed mixed moves.

The onshore yuan was stable at 7.3006, while the offshore yuan dipped to 7.3061, close to record lows. China’s export data showed a spike in March as manufacturers rushed shipments ahead of potential U.S. tariffs.