Currency Markets: U.S. Dollar Falters Amid Trade Deal Uncertainty

The U.S. dollar traded lower against major currencies due to uncertainties surrounding potential U.S. trade deals, while the euro saw gains after Friedrich Merz's election as German chancellor. Investors await clarity on U.S. trade negotiations, causing market unease. U.S. trade deficit hit a record high in March, amplifying economic tensions.

On Tuesday, the U.S. dollar experienced a decline against major currencies, such as the yen, due to uncertainty over impending U.S. trade deals. Simultaneously, the euro advanced following Friedrich Merz's election as Germany's chancellor, contributing to a dynamic day in the international currency markets.

Investors remain on edge, awaiting details from President Trump's administration regarding trade negotiations with nations including China. "The market is getting nervous that we're starting to eat away at the schedule since the 90-day tariff reprieve without anything meaningful being announced," noted Eugene Epstein from Moneycorp.

The trade situation exacerbated market tensions, reflected in the U.S. trade deficit's 14% rise to a historic $140.5 billion in March. Investors also focus on the Federal Reserve's policy decision, which could further impact currency markets.

(With inputs from agencies.)