Author: Kevin Buckland
TOKYO (Reuters) – The dollar traded in narrow ranges against major rivals on Thursday as the currency continued to struggle for direction in the absence of concrete announcements on tariffs from U.S. President Donald Trump.
A number of central bank policy decisions are expected over the next week, with the Bank of Japan expected to raise interest rates at the end of a two-day meeting on Friday.
Decisions on rates by the US Federal Reserve and the European Central Bank are scheduled for Wednesday and Thursday of next week, respectively.
– which measures the currency against its six biggest rivals, including the euro and yen – was unchanged at 108.31 at 0551 GMT, after two days of gains of around 0.1%.
It fell 1.2% on Monday, its steepest one-day drop since November 2023, as Trump’s first day in office brought a slew of executive orders, but none on tariffs.
Until this week, Trump discussed tariffs of around 25% on Canada and Mexico and 10% on China starting February 1. He also promised tariffs on European imports, without giving details.
“President Trump has so far taken a less hostile approach to China than expected,” amid an overall “softer-than-expected policy and tone of tariffs,” said Carol Kong, currency strategist at Commonwealth Bank of Australia (OTC:) .
At the same time, “we are cautious (that) risk sentiment remains fragile and could quickly deteriorate if President Trump takes a more aggressive tone.”
Trump signed a sweeping trade memorandum on Monday, ordering federal agencies to complete comprehensive reviews of a range of trade issues by April 1, which many market participants believe will be a key date in unveiling tariff plans.
“With Trump now in the Oval Office, tariffs remain at the top of the US government’s priorities, even if they were not introduced on the first day in office,” DBS analysts wrote in a research note.
“At next week’s FOMC meeting, the Fed may confirm a longer path to its 2% inflation target due to Trump’s upcoming policies on tariffs and immigration.”
It was little changed at 7.2816 per dollar in offshore trading.
The Japanese yen fell about 0.1% to 156.69 with the market pricing a 96% chance of a quarter-point gain on Friday.
The euro was little changed at $1.0406. The ECB is expected to cut rates by a quarter point next week.
The Canadian dollar remained steady at C$1.4389 against the dollar. The Bank of Canada is believed to cut rates by a quarter of a point next Wednesday.
The Mexican peso was little changed at 20.49 against the US currency.
