The dollar fell and recorded its worst weekly loss

The dollar fell today, and is on track to record its worst weekly loss in more than a year after US President Donald Trump hinted at a less severe stance on imposing tariffs on China, adding to the uncertainty surrounding US trade policies.

The yen trimmed its early gains against the dollar after the Bank of Japan raised interest rates today and revised inflation expectations higher without providing many indications about the timing and pace of increasing interest rates in the future.

Investors tended to sell the dollar after Trump’s inauguration, as what he said about customs tariffs did not materialize immediately, contrary to pledges he made during his election campaign.

In a Fox News interview broadcast yesterday evening, Trump said that he prefers not to have to impose customs duties on China and that he believes he can reach a trade agreement with Beijing.

“This seemed to feed a growing feeling that Trump would not follow through on his protectionist pledges as he said before the inauguration, and that some of those tariff threats may not ultimately materialize if some concessions on trade are achieved,” said Francesco Pisol, currency strategist at ING. .

The yuan received support from Trump’s statements, and rose in local transactions to the highest level in eight weeks, recording 7.2370 against the dollar.

The US President said yesterday that he wants the Federal Reserve (the US central bank) to lower interest rates.

Trump’s statements came days before the first monetary policy meeting held by the US Central Bank after assuming his administration, and with widespread expectations that officials will keep interest rates unchanged.

The dollar index, which measures the performance of the US currency against six major currencies, is heading to suffer its largest weekly loss since November 2023, as it is expected to decline by more than 1.6 percent for the week.

The index reached its lowest level in a month at 107.27 today, Friday, and in the latest trading fell 0.5 percent to 107.6.

The euro rose 0.65 percent after touching the highest level since December 17, at $1.0515. The euro is heading towards recording gains for the week of about two percent.

Data on Friday showed that business activities in the euro zone began the new year by returning to growth at a weak pace.

The pound sterling increased 0.5 percent to $1.2417, and is also on track to record weekly gains of two percent, halting losses that extended for three consecutive weeks.

The Bank of Japan raised interest rates by 25 basis points at the end of a two-day monetary policy meeting.

The yen rose to 154.845 against the dollar after the monetary policy decision, but erased its gains after the press conference of the Bank of Japan Governor, in which he indicated that the central bank was not in a rush to further tighten monetary policy.

There was no significant change in the yen in the latest trading, remaining at 156 against the dollar.

As for digital currencies, Bitcoin recorded in its latest transactions an increase of 2.2 percent to $105,435.