Easy Trading Tips – The U.S. dollar edged higher on Wednesday, with global currencies trading within narrow ranges as investors braced for details on former President Donald Trump’s anticipated tariff plans. The impending announcement has sparked concerns about potential shifts in global trade and financial markets.
The euro hovered around $1.07875, while the British pound dipped slightly to $1.2914 ahead of Trump’s scheduled White House Rose Garden address at 2000 GMT. The speech is expected to unveil significant new trade duties that could disrupt international trade dynamics.
Trump has long touted April 2 as “Liberation Day,” with White House spokesperson Karoline Leavitt confirming that retaliatory tariffs on nations imposing duties on U.S. goods would take effect immediately following his announcement.
“Markets are on edge ahead of this key announcement,” noted Carol Kong, a currency strategist at Commonwealth Bank of Australia. “Sentiment is largely dictated by tariff-related headlines, and currency movements will follow suit.”
The dollar strengthened 0.19% against the Japanese yen, reaching 149.92.
Meanwhile, the Australian dollar rose 0.26% to $0.6295, and the New Zealand dollar gained 0.31% to $0.57185, both rebounding slightly from their earlier declines this week.
Although details remain unclear, the Washington Post reported that Trump’s team is considering a sweeping plan to impose a 20% duty on goods from nearly all foreign countries, rather than selectively targeting specific products or nations.
“A broad 20% tariff could theoretically boost the U.S. dollar, but investors are more concerned about its implications for inflation and stagflation risks in the U.S. economy,” said Chris Weston, head of research at Pepperstone.
Fears of a prolonged trade war, coupled with recent weak economic data, have fueled recession concerns, weighing on the dollar throughout the year. Despite its slight rise on Wednesday, the dollar index stood at 104.28, following a sharp 3.1% drop in March—its worst monthly performance since November 2022.
Data released on Tuesday revealed that U.S. manufacturing activity shrank in March, while factory-level inflation surged to its highest in nearly three years. Analysts suggest the looming tariffs could exacerbate inflationary pressures.
“The anticipation of tariffs has already pushed up prices, as companies scramble to adjust supply chains and reduce import exposure. However, the lack of policy clarity continues to weigh on underlying demand,” wrote Wells Fargo economists in a market note.
Elsewhere, the Canadian dollar declined by 0.1% to C$1.4311, while the Mexican peso eased to 20.3610 per dollar.
Canadian Prime Minister Mark Carney and Mexican President Claudia Sheinbaum held discussions on Tuesday regarding Canada’s plan to counteract what it views as “unjustified trade measures” from the U.S., according to Carney’s office.
Meanwhile, Bank of Japan Governor Kazuo Ueda cautioned that the proposed tariffs could significantly disrupt global trade, potentially slowing worldwide economic growth.