Dollar rebounds on Trump tariff talks, eyes on US data

Following Monday’s choppy action, the US dollar is gathering strength against its rivals early Tuesday as markets assess US President Donald Trump’s latest comments on tariffs.

Later in the day, December Durable Goods Orders and the Conference Board’s Consumer Confidence Index data for January will be featured in the US economic calendar.

US Treasury Secretary Scott Bessent said late Monday that he is pushing for universal tariffs on imports to start at 2.5% and rise gradually, per the Financial Times.

While speaking with reporters on Air Force One early Tuesday, President Trump responded to these remarks and said that he wants tariffs “much bigger than 2.5%,” adding that he hasn’t yet decided on the level. Following this comment, the DXY Dollar Index gained traction and was last seen rising toward 108.00, gaining more than 0.4% on the day.

EURUSD touched its highest level since mid-December above 1.0530 on Monday but erased a large portion of its daily gains to close marginally higher. The pair remained under bearish pressure and was trading below 1.0450 in the European morning.

After closing the third consecutive trading day in positive territory on Monday, GBPUSD lost its traction and dropped below 1.2450 in the early European session on Tuesday.

USDJPY declined nearly 1% on Monday, but erased nearly all of these losses on Tuesday. The pair was last seen trading decisively higher on the day above 155.70, ahead of Bank of Japan’s Policy Meeting Minutes in the early trading hours of the Asian session on Wednesday.

AUDUSD remained on the back foot in the European morning and trades near 0.6250. Fourth-quarter Consumer Price Index (CPI) data from Australia will be watched closely by market participants early Wednesday.

Gold turned south following the previous week’s rally and lost more than 1% on Monday. XAUUSD holds its ground early Tuesday, but trades below $2,750.

(Source: OANDA)