Dollar Soft as USA Prepares to Implement Tariffs on Allies

The US dollar was rather soft today, falling against its most-traded rivals, though it has managed to pare losses versus some of its peers by now. The major topic for today was expiration of the tariff exemption for the closest US allies.
Back in March, US President Donald Trump announced tariffs on steel and aluminum imports but made an exemption for the key trading partners, including Canada, Mexico, and the European Union. The exemption will expire tonight, and it looks like the US government is not going to extend it. The EU and Mexico have already announced that they will retaliate with their own duties on US goods, and Canada will likely respond in a similar manner.
Meanwhile, the USA was unable to get any meaningful concessions from China during their negotiations, meaning that US-China trade war remains a distinct possibility. The NAFTA talks also showed no signs of a noticeable progress.
Macroeconomic reports released in the United States over the Thursday’s session alleviated pressure on the greenback to some degree as most of them were good, with the exception of pending home sales.
EUR/USD was up from 1.1662 to 1.1686 as of 17:32 GMT today, touching the daily high of 1.1724 earlier. GBP/USD rallied from 1.3284 to 1.3348 intraday but has backed off to 1.3292 by now. USD/JPY traded at about 108.84 after opening at 108.90 and falling to the daily low of 108.38.

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