The US Dollar fell to its lowest level this week against six major currencies on Wednesday as investors grew wary of President Donald Trump’s tariff promises as they reshuffled their portfolios ahead of the end of the month.
Markets will be focused on Personal Consumption Expenditures (PCE) price index data due out late Wednesday, before US markets are closed for the Thanksgiving holiday on Thursday.
Trump’s promise on Monday to impose hefty tariffs on Canada, Mexico and China, the US’s three largest trading partners, has sparked investor concerns.
Markets are expected to remain wary of potential announcements and policy changes from Trump, who takes office at the end of January.
Some analysts argue that inflation risks should deter Trump from introducing more disruptive measures for the economy.
Viktor Shvets, global chief strategist at Macquarie Capital, said Trump has picked Scott Bessent as Treasury Secretary, who is expected to rein in the US deficit and use tariffs as a negotiating tool.
The US dollar index, which measures the greenback against a basket of six major currencies, was last down 0.35% at 106.53, after hitting 106.33, its lowest since November 20. The US dollar has strengthened by about 30% since November 6, the day after the US election.
The yen strengthened 0.9% against the US dollar to 151.42, its highest since November 6.
“The fact that tariffs on China will now only increase by 10%, and not 60% as previously threatened, is interpreted positively by the yen,” said Carsten Fritsch, a strategist at Commerzbank, adding that the Japanese yen had been weighed down by geopolitical risks.
The Chinese yuan strengthened 0.06% to 7.2546 after hitting 7.2730 the previous day, its lowest since late July.
The euro rose 0.20% to $1.0510, while the pound rose 0.15% against the US dollar to $1.2590.
The European currency reacted positively to Trump's lack of mention of trade issues with Europe. However, shares of European carmakers fell sharply on Tuesday as they have large production capacity in Mexico that is sold to the US.
Against the Canadian dollar, the US dollar rose 0.15% to C$1.40755, after hitting a 4-1/2-year high of $1.4178 on Tuesday.
