Dollar weakens as steel and aluminum tariff hikes and US-China tensions loom

The dollar opened the week with a downtrend on June 2, following President Trump's announcement late Friday that he intends to raise tariffs on steel and aluminum imports to 50%, effective Wednesday. Beijing responded to the move, rejecting accusations that it had breached a deal concerning key minerals.

On Monday, China's Ministry of Commerce said the claims were not true. They promised to protect their interests. On Sunday, US Treasury Secretary Scott Bessent commented that the matter would be settled in the near future. 

The greenback fell 0.83% to 142.67 yen, partially recovering from an over 1% gain recorded the previous week.

Meanwhile, the euro climbed 0.52% to $1.1415, the British pound surged 0.55% to $1.3534, and the Australian dollar rallied 0.63% to $0.6482.

In contrast, the US dollar index, which tracks how the greenback is doing against six major currencies, went down 0.53% to 98.815.

Since tariffs were imposed on April 2, the dollar has declined 3% against its key counterparts. It had already fallen 1.9% two weeks earlier, when Trump threatened Europe with 50% duties.