- Dollar eases as traders assess tariffs
- Yen surges to two-month high
- Traders monitor geopolitics
LONDON, Feb 20 (Reuters) - The dollar eased against a range of currencies on Thursday, as investors digested U.S. President Donald Trump's latest tariff plans, while the yen rose to multi-week highs as bets mounted of further Bank of Japan rate hikes.
The dollar index , last 0.2% lower at 106.92, was still set for a gain of 0.2% this week, following last week's 1.2% decline.
The yen meanwhile rose to a more than two-month high against the dollar , which was down 0.8% at 150.27 having earlier briefly dropped below the 150 mark, driven mostly by worries about Trump's tariffs as well as traders increasing bets of more Bank of Japan hikes this year.
Versus the euro, the yen rose by as much as 1% and was earlier on track for its biggest daily drop since January 27.
BOJ Governor Kazuo Ueda said on Thursday he met Japanese Prime Minister Shigeru Ishiba for a regular exchange of views on the economy and financial markets.
Bank of Singapore currency strategist Moh Siong Sim said he did not believe there was a single reason for the yen's surge, but that news Ueda and the prime minister had not discussed rises in long-term interest rates could have reassured markets.
"Perhaps that got people excited to think that the recent rise in the yields that supported the yen wasn't a concern, and therefore it's a green light for more yen strength and perhaps a BOJ hike quite soon," he said.
Trump said on Wednesday he would announce tariffs over the next month or sooner, adding lumber and forest products to previously announced plans.
Michael Pfister, a currency analyst at Commerzbank, said Thursday's decline in the dollar was less marked than moves after Trump initially his tariff plans for Mexico and Canada in January.
"We are seeing a bit of dollar weakness, but it's not comparable," he said.
Markets are monitoring geopolitical developments after Trump on Wednesday denounced Ukrainian President Volodymyr Zelenskiy as a dictator, deepening a feud between the two leaders that has alarmed European officials.
Market players are also assessing comments from Trump who said "it's possible" for the U.S. and China to have a new trade deal. Trump also said on Wednesday he expected Chinese President Xi Jinping to visit the United States but did not say when.
“Where we are seeing an impact is with the Australian and New Zealand dollar which have a lot of exposure to Chinese trade," Pfister said.
The Aussie dollar last traded 0.49% higher at $0.63765, also reacting to a mixed jobs report that showed employment outpaced forecasts for a second successive month in January, yet the unemployment rate still ticked higher.
The New Zealand dollar was up 0.44% at $0.57300.
The euro last stood at 156.805 against the yen and was down 0.2% against the dollar at $1.0426.
Sterling was up 0.21% at $1.26125.
Additional reporting by Rae Wee in Singapore; Editing by Christopher Cushing, Sonali Paul and Barbara Lewis
Source: Reuters