Behind the Dollar: Uncertainty Looms Over U.S. Tariffs and Economic Policy

The U.S. dollar nearly reached a one-week low amid uncertainty over President-elect Trump's tariff policies. Markets are speculating on potential inflation impacts and the Federal Reserve's response, while analysts watch upcoming U.S. economic data. Euro appreciation and yen fluctuations further spotlight global economic shifts.

As the U.S. dollar hovered near a one-week low on Tuesday, financial markets braced for upcoming U.S. economic data, bringing President-elect Donald Trump's tariff policies into sharp focus. Investors are evaluating how potential tariffs could drive up inflation, thus affecting the Federal Reserve's ability to adjust interest rates.

Amid speculation, Trump denied reports of plans to impose tariffs on critical imports, leaving markets jittery over future U.S. policy directions. Attention now shifts to the U.S. JOLTS job openings and ISM Services index data for December. The dollar index eased slightly, marking its weakest level since late December.

The euro zone faces potential consequences from Trump's tariff threats, with the euro climbing, while yen movements respond to U.S. Treasury yield changes. Meanwhile, Canadian political dynamics and cryptocurrency fluctuations add layers to an already complex economic landscape.

(With inputs from agencies.)