Dollar mixed due to tariff uncertainty, but set to gain against yen

From Yahoo Finance: 2025-05-29 22:05:00

The dollar is mixed but set for its first monthly gain against the Japanese yen this year due to uncertainty surrounding trade tariffs. A federal appeals court reinstated Trump’s tariffs, with traders expecting some levies to persist. Tariffs are seen as a key revenue source as Congress works on tax reduction bill.

Investors fear tariffs will slow growth and reignite inflation, but deals to drop tariff increases on China and EU have lessened pessimism. Trump accused China of violating tariff agreements, but later expressed hope in resolving differences with President Xi Jinping. The dollar showed little reaction to data on consumer spending and trade deficit.

Bank of America analysts believe USD weakness relies on weaker data. The euro weakened slightly, while German inflation eased, potentially leading to an ECB rate cut. The dollar also weakened against the Japanese yen, which could prompt the central bank to raise interest rates due to rising food costs.



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