By Karen Brettell
NEW YORK (Reuters) – The dollar resumed its fall on Wednesday with both safe havens and risk sensitive currencies outperforming the greenback as traders waited to see if U.S. President Donald Trump’s administration reaches new trading agreements with partners.
The dollar tumbled last week on concerns over the economic impact new tariffs will have, and as investors shifted allocations overseas due to uncertainty over the erratic implementation of the trade levies.
The United States is in discussions with countries including Japan, while tensions between China and the U.S. are intensifying.
“We’re in a little bit of an information vacuum now with this stalemate between China and the U.S and we’re waiting to see what deals get struck with other countries,” said Brad Bechtel, global head of FX at Jefferies in New York.
“There’s some big countries that could potentially be announcing deals, which then puts a framework around what the U.S. administration at least is trying to do with tariffs,” Bechtel said.
Japan is set to begin tariff negotiations with the United States in Washington on Wednesday. South Korean Finance Minister Choi Sang-mok will also hold a meeting with U.S. Treasury Secretary Scott Bessent next week to discuss trade issues.
U.S. Vince President JD Vance said on Tuesday there is a good chance that the United States and Britain will strike a “great agreement” on trade.
Any trade agreements with China and the European Union meanwhile are expected to take longer to reach.
Trump on Tuesday ordered a probe into potential new tariffs on all U.S. critical mineral imports in an attempt to pressure industry leader China.
U.S. data on Wednesday showed that U.S. retail sales surged in March as households boosted purchases of motor vehicles ahead of tariffs. Federal Reserve Chair Jerome Powell is due to speak later on Wednesday.
The euro was last up 0.77% on the day at $1.1368, holding below a three-year high of $1.1473 reached on Friday.
The dollar weakened 0.53% to 142.47 Japanese yen and earlier reached 142.03, slipping slightly below Friday’s low to reach the lowest exchange rate since September 30.
Bechtel notes that volumes are declining ahead of the Good Friday holiday, when most U.S. markets will be closed though foreign exchange will remain open.
The dollar was last down 1.03% against the Swiss franc at 0.815, just slightly above Friday’s 10-year low.
The franc has appreciated the most amongst G10 currencies since the April 2 tariff announcement, and the resulting disinflationary effect could push the Swiss National Bank to bring rates back into negative territory.
The SNB often intervenes directly in markets to limit the franc’s moves, though given Washington’s concern over such action, there would be risk of blowback.
Market speculation the SNB may not intervene could make traders feel more confident about buying the franc, said Chris Turner, global head of markets at ING.
“I’m sure the SNB would say that their hands aren’t tied, but I think investors might be second guessing that,” he said.
Britain’s pound largely looked past cooler than expected inflation data and was last up 0.27% at $1.3267, after hitting a new six-month high of $1.3292 earlier. GBP/
The Australian and New Zealand dollars, which last week notched their largest weekly rises since 2020, were a little off recent peaks but holding higher on the day with the Aussie up 0.43% at $0.6369 and the kiwi gaining 0.15% to $0.5907.
In cryptocurrencies, bitcoin fell 0.11% to $83,904.
(Reporting by Karen Brettell; Additional reporting by Tom Westbrook, Yadarisa Shabong and Alun John; Editing by Shri Navaratnam, Jacqueline Wong, Joe Bavier, Tomasz Janowski and Sharon Singleton)
