The U.S. dollar strengthened decisively on Tuesday after the Trump administration announced targeted measures easing tariff pressures on auto makers, offering temporary relief from 25% tariffs for domestically produced vehicles. Treasury Secretary Scott Bessent reinforced optimism, noting progress toward long-term trade agreements and anticipating reduced supply-chain disruptions.

U.S. Economic Data Highlights Growth Concerns

Despite supportive trade news, soft U.S. economic indicators tempered sentiment. Treasury yields dropped 3-5 basis points amid a record-high March trade deficit, a steep fall in job openings, and a sharp decline in consumer confidence to its lowest since May 2020. Oil prices declined nearly 3% on renewed global demand worries.

EUR/USD Lower Amid Cautious ECB Outlook

EUR/USD drifted modestly lower, confined to its 1.12-1.16 range by month-end dollar demand and euro cross-selling. ECB’s Cipollone warned persistent trade tensions risk suppressing Eurozone growth and inflation, highlighting cautious investor sentiment.

Sterling Pauses Near Highs; BoE in Focus

GBP/USD retreated slightly from near three-year highs on profit-taking, yet found support from strong UK equities. Markets await insights from BoE Deputy Governor Clare Lombardelli and upcoming policy statements amid ongoing economic uncertainty.

USD/JPY Stable, Commodity Currencies Weaken

USD/JPY stabilized near 142, briefly testing lows post-weak U.S. data but quickly rebounding amid low volatility. AUD weakened notably ahead of key inflation data, pressured by falling commodity prices and cautious market sentiment.

Equities Extend Gains; Metals Retreat

The S&P 500 advanced 0.63%, driven by banking and materials sectors. Gold (-0.54%) and copper (-0.83%) fell as the firmer dollar and improved risk sentiment weighed on metals.

Currencies at close: EUR/USD -0.27%, USD/JPY +0.15%, GBP/USD -0.18%, AUD/USD -0.45%, Dollar Index +0.35%.