The US dollar held steady on Thursday, heading for weekly gains, as traders analyzed the latest tariff comments from US President Donald Trump, as well as broader geopolitical developments.
The US dollar index, which measures the greenback's performance against a basket of currencies, fell 0.3% to 106.90.
The euro strengthened against the greenback by 0.2% to $1.0446, while the pound sterling rose 0.2% to $1.2614.
Trump's proposal this week to impose tariffs of around 25% on imports of automotive, semiconductors and pharmaceuticals has heightened market concerns. However, some analysts believe the continued threat from the White House may be part of a broader negotiating tactic.
Meanwhile, minutes of the Federal Reserve's January 28–29 meeting revealed concerns among central bankers about the potential for future interest rate cuts due to inflationary pressures that could arise from Trump's trade and immigration policies.
In Asia, the Japanese yen rose 0.6% against the US dollar, with the USD/JPY pair trading at 150.52 yen, as investors sought safe havens amid potential trade disruptions.
The Chinese yuan pair USD/CNY was little changed, while the offshore pair USD/CNH fell 0.2%.
The Indian rupee via the USD/INR pair fell 0.1%, while the Thai baht via the USD/THB pair traded 0.3% lower.
Australian Dollar Strengthens on Strong Jobs Data; RBA Remains Hawkish The Australian dollar AUD/USD rose 0.3% after strong jobs data for January 2025 was released.
The Australian economy added 44,000 jobs, better than expected, even as the unemployment rate rose to 4.1%. This was driven by a record high labor force participation rate of 67.3%. Earlier this week, the Reserve Bank of Australia cut the cash rate by 25 basis points to 4.10% but maintained a hawkish stance due to persistent inflation concerns.
The combination of strong labor market performance reflects economic resilience, bolsters the central bank’s stance and boosts confidence in the Australian currency.
Bank of Korea Expected to Cut Rates Next Week. South Korean Won in USD/KRW pair fell 0.2% ahead of the Bank of Korea’s interest rate decision next week.
“With the foreign exchange market stabilizing and concerns about a growth slowdown increasing, we expect the Bank of Korea to resume rate cuts next week. However, inflation concerns remain as trade war risks rise,” ING analysts said in a note.
“The political turmoil in Seoul that has led to excessive weakness in the KRW has subsided since the January policy meeting,” they added.
