Dollar Doldrums: Economic Uncertainty and Trump's Trade Policies Shake Markets

The U.S. dollar struggles near a five-month low as trade policies under President Trump weigh on economic forecasts. Euro gains following shifts in Ukraine conflict. Market volatility persists amid anticipation of CPI reports and concerns about a potential recession fueled by Trump's tariff and recession discussions.

On Wednesday, the U.S. dollar remained close to a five-month low against major currencies, as market anxieties centered around President Donald Trump's erratic trade policies. The euro experienced highs due to increased optimism regarding the resolution of the Ukraine crisis.

The Canadian dollar maintained its position following tumultuous trading days when Trump fluctuated on tariffs for steel and aluminium. Anticipation surrounds the Bank of Canada's policy decision, with speculation of an interest rate cut.

Concerns about trade uncertainty, highlighted by Trump's ambiguous comments on a potential recession, have kept investors on edge. The release of the CPI is eagerly awaited, as it could exacerbate or alleviate current stagflation and recession fears, according to market analysts.

(With inputs from agencies.)