Market Jitters as Dollar Wavers Amid Looming Tariff Uncertainty

The dollar hovers below a three-week high as traders anticipate U.S. President Trump's upcoming tariffs announcement. The market remains anxious with the dollar index slightly lower. The euro gained, buoyed by Germany's fiscal policies, while the yen and sterling reacted to domestic economic signals.

The U.S. dollar lingered just below a three-week high against major counterparts on Monday as traders eagerly awaited clarity on President Trump's impending tariff decisions. According to Bloomberg News and the Wall Street Journal, U.S. officials indicated a potential exclusion of certain sectors from these tariffs, set to be announced on April 2.

The dollar index, which evaluates the currency against a basket of six major currencies, slipped slightly to 103.94 by late morning in London after peaking at 104.22 on Friday. "Markets are likely to stay on edge, with nerves frayed over the impending Trump tariff announcement due next week," said Jane Foley, head of FX strategy at Rabobank.

Throughout the year, the dollar has faced pressures due to market concerns that Trump's unpredictable trade tactics might stifle economic growth. Meanwhile, the euro rose by 0.25% to $1.0836, bolstered by strong eurozone business activity data, and the yen and sterling showed mixed reactions to domestic monetary conditions and political developments.