Dollar Stability Amid Tariff Concerns and Global Market Shifts

The dollar showed stability, rising from a three-year low against the euro but staying near a six-month low against the yen. Concerns over U.S. President Trump's trade tariffs affect investor confidence, leading to shifts in global market assets and a reevaluation of U.S. economic policies.

The dollar experienced a boost in stability on Tuesday, recovering from a three-year low against the euro as global risk sentiment showed improvement. However, it hovered near a six-month low against the yen, influenced by investor concerns over the impact of President Donald Trump's trade tariffs on the U.S. economy.

Vassili Serebriakov, FX and macro strategist at UBS, noted that asset flows, rather than traditional short-term drivers such as rate differentials, primarily drove the dollar, citing a market shift away from U.S. exceptionalism towards European optimism and policy uncertainties.

Despite a relatively calm trading week, cautious investors await further tariff announcements. Last week's market was marked by deleveraging and asset reallocation, with markets closed for Good Friday while forex remains open. Additionally, U.S. and Japanese representatives continue tariff removal negotiations.

(With inputs from agencies.)