The EUR/USD pair began the week on a negative note, facing increased selling pressure as it slipped below the 1.0300 mark to hit multi-day lows. This decline coincided with a stronger U.S. dollar, which continued its rebound from last week’s losses. The U.S. Dollar Index (DXY) climbed past the 108.00 level, reaching a four-day high, despite mixed U.S. Treasury yields and ongoing tariff-related developments.

Tariff Uncertainty and Dollar Strength
The greenback’s recent rally can be attributed to renewed trade tensions stemming from President Trump’s tariff policies. Although the 25% tariff on imports from Canada and Mexico has been temporarily delayed, the 10% tariff on Chinese goods remains in effect. This lack of clear direction from the White House initially led to a sell-off in the U.S. dollar late last week as investors unwound long positions.

However, the dollar regained momentum over the weekend following Trump’s announcement of new 25% tariffs on all steel and aluminum imports. He also reiterated plans to introduce reciprocal tariffs targeting countries that impose duties on U.S. exports. This development provided a fresh catalyst for the greenback’s rally, overshadowing earlier uncertainty and boosting demand for the U.S. currency.

As markets digest these new measures, investors will closely monitor any additional trade-related announcements and their potential impact on currency markets.