VINACHEM

The dollar was headed for a steady week on Friday and a quarterly loss next week as concern about tariffs slowing U.S. growth has pushed down U.S. yields, stocks and the currency.

The euro , at just below $1.08, was headed for its largest quarterly rise in more than a year, gaining more than 4% since the start of 2025 on a combination of peace prospects in Ukraine, dollar weakness, and a leap in benchmark German yields.

The yen was marginally firmer and set for a quarterly gain just under 4%, at 151.19 per dollar - mostly unruffled by a sticky Tokyo CPI reading.

The best G10 performers have been the Scandinavians, which have posted year-to-date gains of near 11% for Sweden's crown and almost 9% for Norway's as central bankers seem in no rush to lower rates much further.

Sterling , at $1.2940, was steady in the Asia session for a gain of around 3.5% for the year so far.

Later on Friday, France and Spain publish preliminary inflation figures and the U.S. gets February figures for the Federal Reserve's preferred core PCE inflation gauge.

Anything softer than the 0.3% month-on-month rise, which economists polled by Reuters expect, could keep downward pressure on the dollar and U.S. interest rates.

However traders are on edge about U.S. President Donald Trump's pledge to announce sweeping new tariffs next week, which could restrain trade into the weekend. He already said 25% levies on imported cars would take effect on April 3.

The dollar's decline over the past few months has confounded market expectations for a higher U.S. currency under Trump's tariffs, wiping out long dollar positions and leaving traders unsure how to position or react as he upends trade relations.

So far this year the Canadian dollar is actually up around 0.5% to C$1.4306 per dollar, despite Canada bearing the brunt of several rounds of heavy U.S. tariffs. The euro may be in the frame if Europe is the focus of Trump next week.

"The market has neutralised, in terms of positioning, and it's wait-and-see," said Mahjabeen Zaman, head of foreign exchange research at ANZ in Sydney.

"I think a little bit of that Europe optimism has unwound and that's one of the drivers of bringing the dollar strength back up," she said.

The Australian dollar was 0.4% weaker at $0.6283, trading near the middle of a channel it has kept since December.

It was headed for a quarterly rise of about 2%. Australia's Prime Minister called an election for May 3 on Friday. Next week the Reserve Bank of Australia's new monetary policy board - with two new members - meets for the first time. – Source: Reuters