Published by Global Banking & Finance Review®
Posted on July 6, 2025
3 min readLast updated: January 23, 2026
Add as preferred source on GoogleThe U.S. dollar rose sharply after President Trump announced tariffs on Japan and South Korea, impacting global currency markets.
By Hannah Lang
NEW YORK (Reuters) -The dollar rose sharply against other major currencies on Monday, after U.S. President Donald Trump announced new tariffs set to go into effect August 1 for a spate of countries including Japan and South Korea.
Trump posted letters to the leaders of several countries on his social media platform, saying that he would impose tariffs of 25% on Japan and South Korea. He also sent letters to the leaders of Malaysia, Kazakhstan, Myanmar, South Africa and Laos, all of which outlined tariffs close to the levels previously announced for each country in April.
The dollar's rise was most pronounced against the yen, and was last up 1.09% at 146.130.
The dollar was up 0.38% to 0.798 against the Swiss franc on Monday.
"There were some country-specific things that were already putting some of these currencies on the back foot," said Brad Bechtel, global head of FX at Jefferies. "But clearly, the news this morning out of the U.S. with Trump and the tariffs is definitely hitting currencies other than the dollar, for a change."
The euro slipped 0.57% to $1.172 having rallied over 13% so far this year.
Investors are concerned that Brussels might not be able to secure deals with Washington ahead of the deadline as progress on agreements with the European Union has been slow, despite multiple rounds of negotiations.
Most U.S. trade partners face the prospect of steeper duties at the end of the 90-day moratorium on U.S. President Donald Trump's "Liberation Day" reciprocal tariffs on Wednesday.
Trump has also threatened an additional 10% tariff on nations aligning with what he deemed to be the "anti-American" policies of the BRICS emerging economies.
The dollar index, which measures the currency against six major counterparts, rose 0.517% to 97.467, reaching a one-week high.
The index extended gains from last week when data reflecting labour market resilience pushed back expectations for imminent monetary policy easing by the Federal Reserve.
Still, the index is close to a 3-1/2-year trough and has declined 10% so far this year as investors questioned the safe-haven status of the U.S. currency and reassessed earlier expectations that the U.S. could be spared in the event of a global economic slowdown.
Sterling weakened 0.26% to $1.362, but stayed near its strongest level since October 2021.
Currencies positively correlated to risk appetite, such as the Aussie dollar and the New Zealand dollar lost 0.79% and 0.74%, respectively ahead of monetary policy decisions in both countries in the coming two days.
The Reserve Bank of Australia is widely expected to cut the cash rate by another quarter point on Tuesday, while New Zealand's central bank is predicted to hold rates steady on Wednesday.
U.S. policy uncertainty weighing on the dollar "may not be as potent as in early April, but we think this correlation still matters," Paul Mackel, global head of FX research at HSBC said.
(Reporting by Hannah Lang; additional reporting by Johann M Cherian and Kevin Buckland; Editing by Christian Schmollinger, Rachna Uppal, Gareth Jones, Barbara Lewis and Cynthia Osterman)
Trump announced new tariffs of 25% on Japan and South Korea, effective August 1.
The dollar rose sharply against the yen, increasing by 1.09% to 146.130.
The dollar index rose 0.517% to 97.467, reaching a one-week high, although it remains close to a 3-1/2-year low.
Investors are worried that Brussels may not secure deals with Washington ahead of the deadline due to slow progress on agreements with the European Union.
The Reserve Bank of Australia is expected to cut the cash rate by another quarter point, while New Zealand's central bank is predicted to hold rates steady.
Explore more articles in the Headlines category
