U.S. Dollar Hits Three-Year High as Tariff Hikes Pressure Global Currencies

The U.S. dollar is set for its strongest weekly performance in nearly three years, rallying after President Donald Trump announced steep new tariffs on dozens of trade partners. The dollar index climbed to 100.10, surpassing the key 100 mark for the first time since May 29.

The Japanese yen slumped to a four-month low, trading at 150.64 per dollar, following the Bank of Japan’s signal that it is in no rush to resume interest rate hikes. The euro also weakened, hovering near $1.1420, its lowest level since June 10, pressured by what markets view as an unfavorable trade agreement with Washington.

Trade tensions extended to other currencies. The Swiss franc fell 0.26% to 0.8120 per dollar after the U.S. imposed a 39% tariff on Swiss imports, up from the previously suggested 31%. Canada’s dollar dropped to C$1.3872, its weakest since May 22, after being hit with a 35% levy—higher than the earlier threatened 25%.

Despite Trump’s public criticism of Federal Reserve Chair Jerome Powell and repeated calls for aggressive rate cuts, the dollar’s momentum remained intact. Analysts note that tariff-driven volatility is now largely priced in, with further gains possible in the near term.

“The big move of the week has really been the euro getting rerated downwards,” said Mike Houlahan of Electus Financial, adding that the EU-U.S. trade deal presents another headwind for the euro.

With global trade tensions intensifying and monetary policy diverging, the dollar’s resilience underscores its role as a safe-haven currency amid market uncertainty.