USD index retreats 0.4% as traders reassess Trump tariff implications

The US Dollar Index has declined 0.4% to 104.85 during European morning trade as initial gains from tariff-related optimism dissipate. Markets are digesting the potential implications of Trump-era trade policies and their constitutionality following recent court rulings. The greenback's retreat has been broad-based, with EUR/USD gaining 45 pips to 1.0875 and GBP/USD advancing 0.5% to 1.2650. Asian currencies also strengthened, with USD/JPY falling to 155.20 from overnight highs of 155.80. Traders appear to be taking profits on long dollar positions built up on expectations of aggressive trade measures. Technical indicators suggest the dollar index faces immediate support at 104.50, coinciding with the 50-day moving average. A sustained break below this level could accelerate selling pressure toward 104.00, while resistance now stands at 105.30, yesterday's peak.