Tariffs Turmoil: Dollar Dips Amid U.S.-China Trade Tensions

The dollar weakened against the yen and Swiss franc due to impending U.S. tariffs on China, unsettling global markets. President Trump's tariff hikes deepen concerns of a U.S. recession. Safe-haven currencies gained value while fears of stagflation and further Federal Reserve rate cuts loom large.

The U.S. dollar fell against the yen and Swiss franc on Wednesday, as the United States prepared to impose 104% tariffs on China. These actions have rattled equity markets worldwide, pushing the Chinese yuan to an all-time low.

Amid escalating trade tensions, President Trump remains firm on increasing tariffs, accusing China of currency manipulation to mitigate the impact of levies. The move could spell economic trouble, according to analysts like Chris Weston from Pepperstone, who warned of recession risks for the U.S. economy.

Investor jitters over a potential U.S. downturn have further pressured the dollar, as markets anticipate significant Federal Reserve rate cuts. Safe-haven currencies like the yen and Swiss franc have gained traction, with analysts at Nomura advising long positions on the yen due to heightened stagflation fears.

(With inputs from agencies.)