Dollar Dilemma: Easing Amid Tariff Talks

The U.S. dollar fell toward a one-week low as traders speculated on President-elect Donald Trump's potential tariff policies. Trump's denial of planned sector-specific tariffs buoyed the currency slightly. Key economic indicators and euro area inflation data are also influencing global market dynamics.

The U.S. dollar experienced a dip on Tuesday, dropping towards a one-week low against major currencies. This comes as traders assess the potential impact of President-elect Donald Trump's proposed tariff policies, speculating that they might be less aggressive than initially promised.

On Monday, the greenback faced a downturn against the euro and sterling following a report suggesting that Trump's administration might apply tariffs selectively to sectors deemed critical for national security. The currency, however, recovered some ground after Trump refuted the report via his Truth Social platform, with the U.S. dollar index showing a modest drop of 0.25% to 108.03 as of 0730 GMT.

Meanwhile, attention is also turned toward key economic indicators such as U.S. JOLTS job opening data and euro area inflation figures. These factors, alongside Trump's tariff policies, are anticipated to shape market confidence and influence currency dynamics in the coming sessions.

(With inputs from agencies.)