Dollar Set for Fourth Weekly Loss as Tariff Worries and Safe-Haven Demand Grow

The U.S. dollar is poised for its fourth straight weekly loss as investor concerns over tariffs and trade uncertainty drive a shift away from U.S. assets. Despite a slight rebound from a seven-month low against the yen, the dollar remains under broad pressure, with safe-haven flows boosting currencies like the Swiss franc, euro, and yen.

Trade tensions and shifting tariff policies have weakened confidence in U.S. economic stability. The dollar index is holding at 99.5, on track for its fourth consecutive weekly decline. The Swiss franc has surged 8% since April 2, nearing a decade-high at 0.81 per dollar. The euro and yen have each gained about 5% over the same period.

The dollar briefly dipped to 141.62 yen in Asian trading before recovering above 142 after Japan’s economy minister confirmed currency issues weren’t discussed during U.S.-Japan trade talks. Speculation that the talks might lead to a stronger yen had driven gains, though with yen long positions at record highs, a pullback is possible if no deal emerges.

The euro eased slightly to $1.1373 but remains on track for a fourth weekly rise, even as the European Central Bank prepares for a likely 25-basis-point rate cut. Sterling traded at $1.3216 after weak UK inflation data, while the Australian dollar hovered at $0.6367 ahead of jobs data. The New Zealand dollar held above key technical levels at $0.5932 after an unexpectedly strong inflation report, though gains were limited as the spike is viewed as temporary.

Despite solid U.S. retail sales and no signal of imminent Fed rate cuts from Chair Jerome Powell, selling pressure on the dollar persists. Citi analysts expect the euro to climb to $1.20 within 6–12 months, cautioning that global overexposure to U.S. assets could further weigh on the greenback.