The Dollar weakened against both safe-haven and risk-sensitive currencies on Thursday as traders tried to assess the impact of US President Donald Trump’s dramatic tariff announcement on Wednesday.

On Wednesday, Trump surprised the markets by granting a 90-day delay on his “Liberation Day” reciprocal tariffs, which had only been implemented less than a day earlier, while still keeping a baseline tariff of 10% on most countries.

At the same time, Trump singled out China for additional tariffs, raising the rate to 125% on Chinese imports with immediate effect, after Beijing had responded to earlier US duties with an 84% tariff.

The announcement caused significant volatility across various assets, from government bonds to commodities, and currencies were no exception. In a knee-jerk reaction, the safe-haven Swiss Franc and Japanese Yen weakened, while the Australian Dollar strengthened.

On Thursday, traders adjusted their positions, generally moving in a Dollar-negative direction. The greenback fell by 0.66% against the Yen, reaching 146.7, and dropped 0.5% against the Franc, to 0.8539, Reuters reports.

Over a longer period, the US Dollar remains lower against both safe-haven currencies since the announcement of reciprocal tariffs on 2^nd April. So far this month, the Dollar has lost 2% against the Yen and 3.5% against the Franc.

Part of the pressure on the Dollar stemmed from falling US Treasury yields, marking a return to the traditional correlation that had broken down on Wednesday during Asian and European trading, when the Dollar weakened despite a sharp selloff in Treasuries that drove yields higher.

There was also ongoing nervousness surrounding the US currency due to Trump's inconsistent shifts in trade policy.

Chris Turner, ING global head of research, highlighted the Yen in a morning note, stating that in recent years, the Dollar/Yen pair “has typically been trading in a 150-155 range when US 10-year Treasury yields are up at 4.25/30% as they are today.”

“The fact that USD/JPY is still trading on a 146 handle suggests this flip-flopping of policy is now demanding a higher risk premium of US asset markets.”

The greenback also weakened against other currencies, with the Euro rising 0.7% to $1.1024 and the Pound gaining 0.35% to $1.2875.

Risk-sensitive currencies were also stronger, with the Australian Dollar rising 0.2% to $0.6164, and the Swedish Krona, another currency often linked to the stock market, also gaining, trading at 9.936 to the Dollar.

Furthermore, the Chinese Yuan also attracted attention, slipping to 7.3518 per Dollar in early trading, its weakest level since 26^th December 2007, but later rebounded, trading slightly stronger at 7.344 per Dollar.