USD Strengthens as Trump Tariff Letters Signal Trade Policy Shift

The US dollar gained across major pairs during Asian trading as reports emerged that President Trump will begin issuing tariff notification letters, signaling a potential shift in trade policy. USD/JPY rose 0.4% to test 157.20 resistance, while EUR/USD retreated 0.25% to 1.0420 support. The prospect of renewed tariffs particularly pressured Asian currencies, with USD/CNH jumping 0.6% as markets priced in potential China-US trade tensions. AUD/USD fell 0.5% to 0.6580, reflecting risk-off sentiment and concerns about commodity demand. The tariff announcements could reshape global trade flows and central bank policy responses, with the Federal Reserve potentially facing renewed inflation pressures. Technical indicators show USD index approaching overbought territory at 106.50, suggesting near-term consolidation possible. Traders should monitor upcoming trade policy details for sustained dollar direction.