Dollar falls broadly ahead of US data, tariff uncertainty

By Gertrude Chavez-Dreyfuss and Amanda Cooper

NEW YORK/LONDON (Reuters) -The U.S. dollar slid across the board on Monday, as investors waited warily for further news of U.S. trade policy and braced for a week packed with economic data, which may initially provide an indication on whether U.S. President Donald Trump's trade war is hitting home.

"Today has been characterized by a correlation between the dwindling buck and doubt affecting equities," said Juan Perez, director of trading at Monex USA in Washington.

"While earnings will keep markets eager, the main issue remains the lack of faith in having a good economic situation developing in the U.S. as it tries to act unilaterally and use leverage as the world's largest economy."

Both the S&P 500 and Nasdaq fell on Monday, with the Dow edging higher.

In afternoon trading, the dollar fell 1.1% against the yen to 142.10, posting its biggest daily fall since April 10. The euro also rose versus the greenback, up 0.5% at $1.1419 .

Against the Swiss franc, the dollar was down 0.7% at 0.8205 franc . Earlier in the session, the dollar had posted gains versus the Swiss currency.

The U.S. unit was headed for its largest monthly fall since July last year, as Trump rattled confidence in the dependability of U.S. assets.

The euro, on the other hand, was on track for its largest monthly gain against the dollar in nearly 15 years. The greenback did trim monthly losses against both the euro and yen toward the end of last week amid an apparent conciliatory shift in the tone of U.S.-China relations.

Both sides seemed to soften their respective stances, with the Trump administration signalling openness to reducing tariffs and China exempting some imports from its 125% levies.

Yet where Trump insists there has been progress, and that he has spoken with President Xi Jinping, Beijing has denied trade talks are occurring and on Sunday, Treasury Secretary Scott Bessent did not say that tariff talks were under way.

On Monday, Bessent said top U.S. trading partners had made "very good" proposals to avert U.S. tariffs, and one of the first deals to be signed would likely be with India.

As for China, the top Treasury official said "all aspects of government are in contact with China," and underscored that it was up to China to reduce tensions since it sold five times more goods to the United States than vice versa.

BIG DATA COMING UP

Investors are also awaiting the April U.S. jobs report, due on Friday, where jobs growth is still expected, although at a sharply slower pace than a month earlier.

Federal Reserve officials including Chair Jerome Powell have indicated they would be willing to cut interest rates if it becomes clear there are risks to growth. But most appear content to first determine what impact Trump's tariffs have on real-economy metrics such as inflation and employment before making a move.

The U.S. also releases first-quarter GDP data and the Federal Reserve's favored inflation gauge, core PCE, this week, while GDP and preliminary inflation figures are also due in Europe.

"Data later on may move the buck but for now we see ourselves at the mercy of headlines offering some clue about progress on the trade front," said Monex's Perez.

"Long-term planning as well as forecasting navigating through the headache of ever-changing narratives. With 'Sell USA' mentality abroad, the dollar is quick to suffer from a sour mood.

Across the Atlantic, the euro fell 0.4% against the pound to 85.03 pence, as news hit of a massive power outage across much of Spain on Monday.

Canadians, meanwhile, vote in a general election on Monday, with the ruling Liberal Party holding a narrow lead in opinion polls and a larger one in online prediction markets. Options markets suggest traders are not bracing for much currency volatility, with the U.S. dollar slipping 0.1% to C$1.3836 .

The Bank of Japan, on the other hand, sets monetary policy on Thursday.

No policy change is expected, though markets will be focused on the outlook and how policymakers are planning to navigate an uncertain economic environment- especially as U.S.-Japan trade talks are expected to touch on the currency.

Japan's top currency diplomat Atsushi Mimura on Monday denied a report in the Yomiuri newspaper that Bessent had said during a bilateral meeting with Japan that a weak dollar and a strong yen are desirable.

Currency              

bid

prices at

28 April​

07:37

p.m. GMT

Descripti RIC Last U.S. Pct YTD Pct High Low

on Close Change Bid Bid

Previous

Session

Dollar 98.941 99.729 -0.78% -8.80% 99.837 98.9

index 44

Euro/Doll 1.1422 1.1362 0.52% 10.32% $1.1423 $1.1

ar 329

Dollar/Ye 142.04 143.65 -1.11% -9.72% 143.895 142.

n 06

Euro/Yen 162.27​ 163.25 -0.6% -0.58% 163.33 162.

22

Dollar/Sw 0.8206 0.8266 -0.71% -9.56% 0.8317 0.82

iss 01

Sterling/ 1.3429 1.3311 0.9% 7.38% $1.3434 $1.3

Dollar 281​

Dollar/Ca 1.3832 1.3851 -0.12% -3.8% 1.3893 1.38

nadian 25

Aussie/Do 0.6429 0.6397 0.52% 3.92% $0.643 $0.6

llar 369

Euro/Swis 0.9371 0.9402 -0.33% -0.23% 0.9437 0.93

s 63

Euro/Ster 0.8503 0.8537 -0.4% 2.77% 0.8544 0.84

ling 94

NZ 0.5971 0.5963 0.13% 6.71% $0.5981 0.59

Dollar/Do 29

llar

Dollar/No 10.3348​ 10.4196 -0.81% -9.07% 10.4628 10.3

rway 373

Euro/Norw 11.8046 11.8498 -0.38% 0.3% 11.8807 11.7

ay 855

Dollar/Sw 9.5764 9.6627 -0.89% -13.08% 9.7335 9.57

eden 65

Euro/Swed 10.9382 10.9918 -0.49% -4.61% 11.0491 10.9

en 355

(Reporting by Gertrude Chavez-Dreyfuss in New York and Amanda Cooper in London; Additional reporting by Tom Westbrook in Singapore; Editing by Shri Navaratnam, Gareth Jones, Emelia Sithole-Matarise, and Marguerita Choy)