Dollar Dips on Trade Jitters and Trump Tariff Talk

The U.S. dollar hit a one-week low as investors reacted to President-elect Donald Trump's tariff promises. Market fluctuations are tied to Trump's upcoming policies and the PCE price index release. Analysts observe inflation concerns, while currency performances show positive responses to geopolitical movements.

The U.S. dollar fell to a one-week low against major currencies on Wednesday, influenced by investor caution over President-elect Donald Trump's tariff promises. As investors adjust their portfolios ahead of month's end, all eyes are on the Personal Consumption Expenditures (PCE) price index set for later release.

Trump's pledge of significant tariffs on Canada, Mexico, and China, the U.S.'s top trade partners, has fueled market anxiety. With expectations of erratic announcements and potential policy reversals from Trump, who assumes office in January, the markets remain on edge.

Analysts emphasize the importance of inflation, inequality, and immigration as factors in Trump's victory. Viktor Shvets of Macquarie Capital warns of potential electoral backlash without economic improvement, noting Trump's selection of Scott Bessent as Treasury Secretary to manage deficits and use tariffs strategically.

(With inputs from agencies.)