The U.S. dollar edged higher on Wednesday as traders braced for President Trump’s highly anticipated tariff announcement. Set for later in the day, the move has kept markets cautious, with most major currencies trading in tight ranges. The dollar index rose slightly to 104.28, bouncing back from its weakest monthly performance since late 2022.
Markets brace for “Liberation Day”
Trump has teased April 2 as “Liberation Day,” with reports suggesting a possible 20% blanket tariff on imports from nearly every country. While this could support the dollar in the short term, investors remain concerned about its longer-term effects—especially the risk of triggering inflation and slowing economic growth.
Weaker data fuels recession talk
Recent U.S. data hasn’t helped ease nerves. Manufacturing activity contracted in March, while factory-level inflation surged to a near three-year high. Economists warn that companies are rushing to stockpile goods ahead of potential tariffs, which is pushing prices up while dampening actual demand.
Global response adds to uncertainty
Elsewhere, the Canadian dollar and Mexican peso dipped slightly, while the Australian and New Zealand dollars saw small rebounds. Canada and Mexico are already pushing back against the U.S. plans, and Japan’s central bank warned the tariffs could hit global growth hard—adding more tension to already jittery markets.
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