FX.co ★ Dollar Declines as Trade War Tensions Rise

On Tuesday, the dollar index experienced a decline to 102.8, driven by heightened worries surrounding the ongoing trade war, which negatively impacted investor sentiment. This drop came in the wake of a White House official confirming that the United States would implement tariffs reaching up to 104% on Chinese imports, scheduled to commence at midnight. Earlier in the trading session, there was a sense of optimism in the markets regarding potential progress in the tariff discussions. Treasury Secretary Bessent mentioned that over 70 countries had initiated contact with the White House, signaling the possibility of several promising trade agreements on the horizon. Adding to the positive outlook, President Trump communicated via Truth Social about having a "great call" with South Korea's acting president, also noting that China is increasingly eager to negotiate a deal. The U.S. dollar weakened by more than 1% against both the yen and the Swiss franc, as investors gravitated towards safe-haven assets amidst the growing uncertainty.