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A person shows US dollars at a currency exchange store
The US dollar hovered near its lowest since 2021 against the euro and the weakest since 2015 versus the Swiss franc on Monday, with traders alert for any trade-related headlines in the countdown to President Donald Trump’s tariff deadline.
Most US trade partners are set to see much steeper duties at the end of the 90-day moratorium on Trump’s “Liberation Day” reciprocal tariffs on Wednesday, with the President on Sunday clarifying the new rates would take effect from August 1.
Trump said his administration is close to finalizing several trade deals in the coming days, while he will name some dozen countries later on Monday that are receiving letters with their new, higher levies.
So far, only Britain, China and Vietnam have agreed any sort of trade deal with the White House.
“Market volatility appears inevitable when the pause officially ends and new tariff levels are announced,” James Kniveton, a senior corporate FX dealer at Convera, wrote in a client note.
At the same time, “the impact may prove more muted this time,” he said. “Unlike previous announcements where tariff levels exceeded expectations, current proposals are largely anticipated. Moreover, markets appear to be pricing in continued deadline extensions.”
The dollar slipped 0.1% to 0.7944 Swiss franc CHF= in Asian trading, edging back towards the July 1 low of 0.7869 franc, a level not seen since January 2015.
The US currency edged up slightly to 144.73 yen.
The euro EUR= eased 0.1% to $1.1773, not straying far from the July 1 peak of $1.1829, the highest since September 2021. Sterling weakened 0.2% to $1.3628, but remained not far from the July 1 top at $1.3787, the strongest since October 2021.
The dollar index =USD, which measures the currency against those four rivals and two more major counterparts, added 0.1% to 97.058, hovering above Tuesday’s nearly 3-1/2-year trough of 96.373.
The Antipodean currencies were weak ahead of monetary policy decisions in both Australia and New Zealand over the next two days.
The Aussie dollar dropped 0.5% to $0.6519, sliding further from July 1’s nearly eight-month high of $0.6590. The Reserve Bank of Australia is widely expected to cut the cash rate by another quarter point on Tuesday amid a cooling in inflation and an uncertain growth outlook.
“These factors, combined with ongoing concerns around tariffs and trade, have negated any concerns that the RBA may have held about a tight labour market,” IG analyst Tony Sycamore wrote in a client note.
“Forward guidance is expected to sound dovish, leaving the door open for further rate cuts into year-end.”
The Reserve Bank of New Zealand, by contrast, is predicted by a majority of economists to hold rates steady on Wednesday, although one more quarter-point reduction is expected later this year.
The New Zealand dollar slipped 0.4% to $0.6026.
