NEW YORK: The US dollar drifted higher on Tuesday, lifted by the Trump administration’s plan to ease the impact of auto duties on local car manufacturers as well as the prospect of more tariff deals with some trading partners.
The US government said it plans to alleviate some duties placed on foreign parts in domestically manufactured cars and keep tariffs on cars made abroad from stacking on other duties. White House Press Secretary Karoline Leavitt said President Donald Trump will sign an executive order on auto tariffs on Tuesday.
At the same time, the dollar got a boost from comments by US Treasury Secretary Scott Bessent on Tuesday who said the administration is making substantial progress on tariff negotiations, noting that deals are forthcoming for India and South Korea. He said he will speak to at least 17 trade partners over the next few weeks.
In mid-morning trading, the dollar rose 0.2% against the yen to 142.22, rising in four of the last six sessions. On the month, however, the dollar has lost more than 5% of its value against the Japanese currency, on track for its biggest monthly fall since July 2024.
Analysts noted that the yen could strengthen further, as a global economic slowdown may prompt major central banks — including the Federal Reserve — to implement deeper rate cuts, narrowing yield differentials with Japan.
The dollar also gained against the euro, which slid 0.2% to $1.1395. But Europe’s shared currency showed steep gains for April of 5.4%, on pace for its largest monthly gain since November 2022.
Elsewhere, the Aussie dollar slumped 0.8% to US$0.6383 after hitting a more than four-month top of US$0.6450.
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