USD Weakens as Trump's 50% Steel Tariffs Loom for June 4

The US dollar has come under pressure across major pairs as markets digest the White House announcement of significantly increased steel tariffs effective June 4, 2025. The new tariffs will double from 25% to 50% for all countries except the UK, which maintains its 25% rate. This protectionist move has raised concerns about potential retaliatory measures and global trade disruptions, weighing on USD sentiment. Currency pairs like EUR/USD and GBP/USD are expected to see upward pressure as traders price in the inflationary impact of higher import costs on the US economy. The selective exemption for UK steel suggests potential diplomatic considerations that could further strengthen GBP/USD. Technical levels show USD index testing support at 104.50, with a break below potentially accelerating dollar weakness. Traders should monitor Asian and European market reactions for further directional cues as the implementation date approaches.