Dollar Steady Below 3-Week High as Markets Await Trump’s Tariff Decision

The U.S. dollar hovered just below a three-week high on Monday, with investors awaiting clarity on President Donald Trump’s next round of tariffs, due April 2. The U.S. dollar index stood flat at 104.03 after reaching 104.22 on Friday, its highest since March 7. Last week, the index posted a 0.4% gain, its first positive week in March.

Despite recent gains, the greenback remains under pressure in 2025 as concerns over Trump’s unpredictable trade policies outweigh initial optimism about pro-growth reforms. However, Goldman Sachs analysts remain cautiously bullish, stating that “the market has rapidly repriced the shift in the growth outlook,” and expects further dollar strength amid tariff escalations.

The dollar climbed 0.3% against the yen to 149.77, supported by rising U.S. Treasury yields, with the 10-year yield reaching 4.277%. Meanwhile, the euro edged up 0.24% to $1.0836 after slipping from last week’s high of $1.0955, driven by Germany’s move to loosen fiscal rules. Analysts at Commonwealth Bank of Australia noted that the euro may give back gains as fiscal spending implementation lags.

Sterling rose 0.15% to $1.2934, while the Australian dollar gained 0.29% to $0.6291. Bitcoin rose 1% to $85,965.

The Turkish lira traded steady at 38.0050 per dollar, despite political turmoil. Istanbul Mayor Ekrem Imamoglu, a key rival to President Erdogan, was jailed pending corruption charges. The move, widely criticized as politically motivated, sparked mass protests. Last week, the lira briefly hit a record low of 42 after the central bank raised its overnight lending rate to 46%, signaling a tighter monetary policy.

Markets remain on edge ahead of Trump’s tariff announcement, a key driver for global currency movements this week.