U.S. Dollar Falls Amid Ongoing Uncertainty On US Trade Policy Outlook

(RTTNews) - The U.S. dollar weakened against other major currencies in the Asian session on Thursday, as traders remain concerned over a potential military conflict between the United States and Iran as well as the ongoing uncertainty about US President Donald Trump's tariff policies.

The Supreme Court's (SC) decision to declare President Donald Trump's tariffs "illegal" due to their support from economic emergency powers created confusion in US trade policy.

Market participants are concerned that Washington's trading partners may want changes to trade agreements in order to profit from the Supreme Court's decision. However, if any country plans to violate trade agreements, US President Trump has already threatened to impose harsher penalties.

Meanwhile, easing concerns over potential AI disruptions after strong earnings from U.S. tech giants Nvidia and Oracle, led to the upturn of investor sentiment.

Furthermore, Kristalina Georgieva, Managing Director of the International Monetary Fund, stated that tariffs had contributed to US goods inflation and proposed that lowering the federal funds rate to between 3.25% and 3.50% would be consistent with a return to full employment.

She emphasized, however, that strong budgetary action will be necessary to put the US public debt on a sustainable downward trajectory.

In the Asian trading today, the U.S. dollar fell to an 8-day low of 1.3575 against the pound, from yesterday's closing value of 1.3559. The greenback may test support near the 1.38 region.

Against the euro and the Swiss franc, the greenback slipped to 3-day lows of 1.1829 and 0.7711 from Wednesday's closing quotes of 1.1811 and 0.7726, respectively. If the greenback extends its downtrend, it is likely to find support around 1.21 against the euro and 0.76 against the franc.

The greenback edged down to 155.76 against the yen, from Wednesday's closing value of 156.36. The next possible downside target for the greenback is seen around the 152.00 region.

Against Australia, the New Zealand and the Canadian dollars, the greenback slipped to a 2-week low of 0.7137, an 8-day low of 0.6013 and a 3-day low of 1.3659 from yesterday's closing quotes of 0.7124, 0.5999 and 1.3675, respectively. On the downside, 0.72 against the aussie, 0.61 against the kiwi and 1.35 against the loonie are seen as the next support level for the greenback.

Looking ahead, the European Central Bank publishes euro area money supply and private sector credit data for January and Eurozone economic confidence index for February are due to be released in the European session.

In the New York session, Canada current account for the fourth quarter and average weekly earnings for December, U.S. weekly jobless claims data and U.S. Kansas Fed composite index for February are slated for release.