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Dollar drifts near multi-year lows as investors brace for Trump tariff deadline - REUTERS
Summary
- Moratorium on 'Liberation Day' levies ends on Wednesday
- Higher tariff rates to come into effect from August 1
- Trump threatens additional tariffs on BRICS nations
- Aussie, NZ dollars decline ahead of central bank decisions
TOKYO, July 7 (Reuters) - The U.S. dollar wobbled close to multi-year lows against major currency peers on Monday, with traders alert for any trade-related headlines in the countdown to President Donald Trump's tariff deadline.
Most U.S. trade partners are set to see much steeper duties at the end of the 90-day moratorium on Trump's "Liberation Day" reciprocal tariffs on Wednesday. Trump clarified on Sunday that the new rates would take effect from August 1.
Trump said his administration was close to finalising several trade deals in the coming days but he will also name some dozen countries later on Monday that are receiving letters with their new, higher levies.
Trump also threatened to slap an additional 10% tariff on nations aligning with the "anti-American" policies of the BRICS emerging economies.
So far, only Britain, China and Vietnam have agreed any sort of trade deal with the Trump administration.
The tariff uncertainty weighed in particular on the risk-sensitive Australian and New Zealand dollars, ahead of monetary policy decisions in both countries in the coming two days.
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"Market volatility appears inevitable when the pause officially ends and new tariff levels are announced," James Kniveton, a senior corporate FX dealer at Convera, wrote in a client note.
At the same time, "the impact may prove more muted this time," he said. "Unlike previous announcements where tariff levels exceeded expectations, current proposals are largely anticipated. Moreover, markets appear to be pricing in continued deadline extensions."
Options data also reflected that currency markets were pricing in limited volatility resurgence ahead of the tariff deadline on expectations that there could be further extensions.
The dollar was flat at 0.7959 Swiss franc on Monday, edging back towards the July 1 low of 0.7869 franc, a level not seen since January 2015.
The euro slipped 0.3% to $1.1750, while the dollar firmed 0.38% to 145.15 yen , reversing an earlier decline.
