Dollar resumes fall as investors wait on trade talks

The dollar resumed its fall on Wednesday with both safe-havens and risk-sensitive currencies outperforming the greenback as traders waited to see if U.S. President Donald Trump’s administration reaches new trading agreements with partners.The dollar tumbled last week on concerns over the economic impact of new tariffs and as investors shifted allocations overseas due to uncertainty on the erratic implementation of the trade levies.The United States is in discussions with countries including Japan, while tensions between China and the U.S. are intensifying.“We're in a little bit of an information vacuum now with this stalemate between China and the U.S, and we're waiting to see what deals get struck with other countries,” said Brad Bechtel, global head of FX at Jefferies in New York.“There's some big countries that could potentially be announcing deals, which then puts a framework around what the U.S. administration at least is trying to do with tariffs,” Bechtel said.Trump said he will personally attend a meeting of Japanese and U.S. trade officials on Wednesday. South Korean Finance Minister Choi Sang-mok will hold a meeting with U.S. Treasury Secretary Scott Bessent next week to discuss trade issues.Vice President JD Vance said on Tuesday there is a good chance that the United States and Britain will strike a "great agreement" on trade. Any trade agreements with China and the European Union are expected to take longer to reach.Trump on Tuesday ordered a probe into potential new tariffs on all U.S. critical mineral imports in an attempt to pressure industry leader China. Federal Reserve Chair Jerome Powell said on Wednesday that U.S. economic growth appears to be slowing, with consumer spending growing modestly, a rush of imports to avoid tariffs likely to weigh on estimates of gross domestic product, and sentiment souring."The Fed is waiting to see where things go before they make any type of movement on rates, to see if inflation is going to be temporary or if it's going to be a one-time thing, to see how long these tariffs last and whether or not there's any kind of change to it," said Robert Pavlik, senior portfolio manager at Dakota Wealth.Powell also suggested that hopes the U.S. central bank will step in to tamp down on market volatility are likely misplaced.U.S. data on Wednesday showed U.S. retail sales surged in March as households boosted purchases of motor vehicles ahead of tariffs. The euro was last up 0.84% on the day at $1.1376, holding below a three-year high of $1.1473 reached on Friday.The dollar weakened 0.71% to 142.22 Japanese yen after earlier reaching 142.03, slipping slightly below Friday's low to hit the lowest exchange rate since September 30. Bechtel noted that volumes were declining ahead of the Good Friday holiday, when most U.S. markets will be closed though foreign exchange will remain open.The dollar was last down 1% against the Swiss franc at 0.815 , just slightly above Friday's 10-year low.The franc has appreciated the most among G10 currencies since the April 2 tariff announcement, and the resulting disinflationary effect could push the Swiss National Bank to bring rates back into negative territory.The SNB often intervenes directly in markets to limit the franc's moves, though given Washington's concern over such action, there would be risk of blowback.Market speculation that the SNB may not intervene could make traders feel more confident about buying the franc, said Chris Turner, global head of markets at ING."I'm sure the SNB would say that their hands aren't tied, but I think investors might be second guessing that," he said.The British pound was last down 0.07% at $1.3221 , after hitting a six-month high of $1.3292 earlier. The Canadian dollar gained 0.5% to C$1.39 per dollar after the Bank of Canada held its key policy rate at 2.75%, its first pause after seven consecutive cuts, and said it would be ready to act decisively if needed to keep inflation under control.The Australian dollar rose 0.35% at $0.6365 and earlier reached $0.6391, the highest since February 24. In cryptocurrencies, bitcoin was flat on the day at $83,989.