On February 4, the U.S. dollar held firm amid President Donald Trump's tariff maneuvers, seen more as bargaining tactics than firm actions, especially after deferring measures against Mexico and Canada.
Conversely, the new Trump administration enacted a 10% tariff on Chinese imports, causing currency analysts to anticipate ongoing fluctuation due to tariff-related developments.
The U.S. dollar index, which measures the dollar against major currencies, rose by 0.1% to 108.5, while the Canadian dollar and Mexican peso declined following a previous rebound.
Amid trade tension, the euro weakened slightly as the U.S. warned of possible trade tariffs on the European Union, expected to elevate U.S. inflation and maintain higher U.S. interest rates.
Analysts highlighted challenges in meeting Trump's demands, with China responding swiftly by levying tariffs on some U.S. imports.
In negotiations, the Chinese yuan increased by 0.1% to 7.30 per dollar in offshore trading, while the Australian dollar, often influenced by Chinese markets, decreased by 0.3%.
Market experts monitored euro fluctuations, with a focus on parity, observing potential impacts from U.S. tariffs. Reports indicated potential deflationary effects on the euro area from U.S. tariffs.
Signaling market shifts, the pound dipped against the euro, while the U.S. dollar advanced to 155.38 yen, as the Japanese currency was viewed as a safe haven amid fluctuating market conditions.