USD mixed amid renewed tariff focus – Scotiabank

02/25/2025 13:08:19 GMT|ByFXStreet Insights Team

The US Dollar (USD) is trading mixed against the major currencies in a session where risk appetite appears to be faltering, Scotiabank's Chief FX Strategist Shaun Osborne notes.

Renewed tariff focus pushes bond yields lower

"After a period of tariff calm, and amid a relatively quiet period for data releases, comments yesterday from President Trump appearing to confirm that tariffs on Canada and Mexico were still on track have unsettled markets again. Bonds are bid, with 10Y US Treasury yields easing 6bps on the session and the VIX has advanced to near the 20 level."

"Global stocks are narrowly mixed but are clearly finding it hard to advance. After nudging higher form Friday’s low, the DXY may advance a little further in the short run. But the broader pattern of trade in the USD continues to track closely that of the initial period after Trump’s first term win, something that more sell-side strategists are taking note of. That might still help moderate expectations for broader USD strength to persist or extend."

"While tariff uncertainty persists, the USD does appear to be somewhat overvalued at least relative to what tariff action has been applied so far (just the additional tariffs on China) and, perhaps what might eventually emerge. The US releases housing data, Conference Board Consumer Confidence and the Richmond Fed’s Manufacturing Index this morning. The Fed’s Barr (voter) and Barkin (non-voter) speak today."

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