Dollar Tumbles Amid Tariff Confusion and Investor Uncertainty

The dollar weakened against major currencies due to ongoing U.S. tariff fluctuations and investor uncertainty. Despite slight gains against the Swiss franc, the dollar hit multi-year lows against the euro and yen. Tariff reprieves bring temporary market relief, yet investor confidence remains shaky with potential Fed rate cuts looming.

The dollar continued to falter on Tuesday, pressing close to a three-year low against the euro and a six-month trough against the yen, as investors grappled with fluctuating U.S. tariff policies. Despite Treasury yields' surge, confidence in the dollar and U.S. assets remains unstable.

Currency markets have calmed somewhat in Asian trading hours following last week's turmoil, though the dollar maintains its weakness at 142.99 yen and one euro fetching $1.136. Market focus remains on the U.S. tariffs' uncertain trajectory, further compounded by conflicting statements from President Trump.

Amid the uncertainty, Kieran Williams of InTouch Capital Markets highlighted an investor rotation away from dollar assets. Meanwhile, easing U.S. Treasury yields and dovish Fed comments suggest potential rate cuts to mitigate recession risks, adding to market unease.

(With inputs from agencies.)