The U.S. dollar held steady against other major currencies on Monday, as traders digested last week’s news of possible U.S. tariffs on steel and aluminum imports.
The greenback initially weakened after U.S. President Donald Trump announced plans on Thursday to impose tariffs of 25% on imported steel and 10% on aluminum, in a move to “protect U.S. industry”.
The news sparked concerns over potential trade wars, which would have a negative impact on the U.S. economy.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 89.93 by 05:15 a.m. ET (09:15 GMT).
The euro was little changed, with EUR/USD at 1.2321, while GBP/USD edged up 0.11% to 1.3815.
Markets were also jittery after Italian elections on Sunday ended in a hung parliament with none of the country’s three main groups able to rule alone.
On a more positive note, Germany’s Social Democratic Party (SPD) voted on Sunday for a coalition deal with Chancelor Angela Merkel’s conservatives, ending two months of political uncertainty. The new government could be in place in less than two weeks.
In the UK, data earlier showed that service sector activity accelerated last month.
Elsewhere, the yen and the Swiss franc were stronger, with USD/JPY down 0.18% at 105.56 and with USD/CHF slipping 0.14% to trade at 0.9361.
The Australian and New Zealand dollars were lower, with AUD/USD down 0.18% at 0.778 and with NZD/USD falling 0.14% to 0.7219.
Meanwhile, USD/CAD eased up 0.09% to trade at 1.2892.