USD holds steady as markets digest Trump tariff threats

The US dollar is maintaining stability across major pairs during European trading, with markets cautiously digesting President Trump's latest tariff threats. Unlike previous sharp reactions to trade headlines, today's response has been notably measured, with major dollar pairs showing minimal movement of less than 0.1%. The subdued volatility suggests traders are adopting a wait-and-see approach, similar to the buildup before April's reciprocal tariff announcements. Market participants appear to be reassessing the likelihood of Trump following through on his threats, which could potentially disrupt global trade flows and impact currency valuations. The lack of significant economic data releases today has left tariff headlines as the primary driver. Technical levels remain intact with EUR/USD hovering near 1.0850 and USD/JPY around 149.50. Traders should monitor any escalation in trade rhetoric which could trigger increased volatility and safe-haven flows.