Dollar Faces Uncertainty Amid Tariff Tensions and Central Bank Decisions

The dollar traded in tight ranges against major peers as it grapples with uncertainty around U.S. President Trump's tariffs and upcoming central bank policy decisions. Central banks, including the Bank of Japan, are expected to deliberate on interest rate changes amidst looming trade tensions with the U.S.

The dollar faced limited movement against the backdrop of unclear announcements on tariffs from President Trump and a series of central bank policy decisions. Investors are closely monitoring these developments as they seek to understand the potential impacts on global economies.

Ahead of next week's significant rate decisions from the U.S. Federal Reserve and European Central Bank, the dollar index remained static at 108.31, maintaining earlier minor gains. The uncertainty stems from Trump's undefined tariffs, which could affect Canada, Mexico, and China come February.

Experts such as Carol Kong warn of persistent market fragility, pending potential shifts in Trump's trade strategies. Attention is focused on April 1, when substantial policy details are anticipated. Meanwhile, currency fluctuations continue with Japan, Europe, Canada, and Mexico responding to both local and international pressures.

(With inputs from agencies.)