(Bloomberg) -- A dollar gauge declined, weighed down by trade uncertainty. The Australian currency was outperforming all peers in the Group of 10 against the greenback, rallying after domestic inflation beat estimates.
- The Bloomberg Dollar Spot Index fell 0.2%; the index had two days of modest gains before dropping Wednesday
- President Donald Trump offered a defiant defense of his policies and economic record in a State of the Union address, reiterating he will impose trade tariffs through other means after the Supreme Court struck them down
- “Dollar is losing momentum due to persistent structural headwinds from Trump,” said Andrew Hazlett, a foreign-exchange trader at Monex Inc. “The new tariffs and their implications for trade policy is weighing heavily on dollar sentiment”
- AUD/USD gained 0.9% to 0.7118; Australia’s monthly inflation came in stronger than expected in January, driven largely by housing costs and suggesting monetary policy settings may need to be tightened further
- The pair is getting close to the three-year high it touched earlier this month
- AUD/JPY up 1.1% to 111.216, highest since 1990
- The Japanese yen was lagging behind all peers in the Group of 10 after Prime Minister Sanae Takaichi’s government nominated two new Bank of Japan policy board members who are seen as dovish
- USD/JPY rose 0.3% to 156.29
- Money markets price about 47bps of tightening by year-end, compared to 58bps on Tuesday
- GBP/USD gained 0.5% to 1.3562, its best day since Feb. 9
Reporting by Anya Andrianova and Vassilis Karamanis
