Dollar Strengthens Amid Trade Tariff Uncertainties and U.S. Policy Signals

The U.S. dollar strengthened on Monday as major global currencies faltered, driven by uncertain signals from U.S. trade officials about upcoming tariffs, which are set to be determined this week. President Donald Trump outlined plans for new tariffs effective August 1, focusing on countries trading under 'anti-American' policies, notably those linked to BRICS nations.

Despite sounding assertive on further tariffs, the administration appears hesitant to intensify its tariff positions, focusing instead on strategic talks. Chris Beauchamp, IG's chief market analyst, notes skepticism about the U.S. administration's readiness to follow through, especially considering past market volatility.

Factors such as labor market resilience have recently boosted the dollar, but its safe-haven appeal faces doubt, particularly under ongoing trade negotiations with Japan and the EU. Currency markets remained tense, reflecting anticipated volatility and uncertainty, as evidenced by fluctuations in the Swiss franc, euro, and yen ahead of potential central bank policies in Australia and New Zealand.

(With inputs from agencies.)