Tariff Tensions: Markets Brace Amid Economic Uncertainty

The U.S. dollar experienced a slight increase as investors evaluated economic uncertainties and potential tariffs by President Trump on autos, chips, and pharmaceuticals. British markets await finance minister Rachel Reeves' spending cuts to reassure investors, amid growing inflation and currency fluctuations in global markets.

The U.S. dollar rose slightly on Wednesday as investors grappled with economic uncertainties and speculation about new tariffs. President Trump is expected to provide details of a new tariff round on autos, chips, and pharmaceuticals next week, stirring market dynamics.

In the UK, finance minister Rachel Reeves plans to announce spending cuts to address faltering growth, aiming to gain investor trust. Meanwhile, British inflation has slowed and markets are pricing in potential BoE rate cuts, as the pound weakens.

Globally, the euro dipped after Germany's fiscal plans boosted it earlier, while emerging markets also experienced fluctuations. The Turkish lira stabilized below 38 to the dollar following economic reassurances amid political turmoil.

(With inputs from agencies.)