Dollar Rebounds Amid Strong US Services Data and Tariff Optimism

The U.S. dollar surged to a three-week high following robust services data and positive tariff news. President Trump's announcement on tariff leniencies boosted Wall Street's outlook. The euro and yen showed fluctuations, while consumer confidence data could further impact the dollar's trajectory. Australia's fiscal measures had minimal currency effects.

The U.S. dollar climbed to its highest point in nearly three weeks on Tuesday, spurred by strong U.S. services data and cautious optimism surrounding President Donald Trump's tariff policies. Trump's indication that not all planned tariffs would take effect on April 2 provided confidence to Wall Street, alleviating fears of potential economic slowdown.

The U.S. dollar index recorded its fifth consecutive session of gains, reaching 104.46, its best performance since March 5. Concurrently, the euro fell to $1.0777, marking a three-week low. A robust services component in S&P Global's flash U.S. PMI figures on Monday, combined with a shift back into Wall Street stocks, bolstered U.S. bond yields, supporting the dollar's rise.

Meanwhile, investor sentiment also monitored other global currency movements. The yen experienced minor fluctuations, with expectations that the Bank of Japan will proceed cautiously with monetary tightening. In Australia, fiscal policy announcements, including tax cuts aimed at alleviating living costs, had little effect on the currency. The British pound maintained just above a two-week low as investors awaited pivotal announcements on government spending.

(With inputs from agencies.)