Volkswacht Bodensee - Dollar struggles to recover from losses after Trump comments

Traders are also keeping an eye on the Federal Reserve's latest meeting, hoping for some guidance on its plans for interest rates amid uncertainty over the US president's policies following his latest tariff threats.

The greenback has retreated across the board this week following reports that the New York Fed had checked in with traders about the yen's exchange rate, which fuelled talk that US and Japanese officials were prepared to stage a joint intervention.

That led to speculation the White House was prepared to let the dollar weaken, and Trump did little to dismiss that when asked Tuesday if he was worried about the decline.

"No, I think it's great," he told reporters in Iowa as the unit hit its weakest level against the euro in four-and-a-half years and a two-and-half-month low against the yen. "Look at the business we're doing. The dollar's doing great."

He added: "I want it to be -- just seek its own level, which is the fair thing to do."

The dollar also sank against the pound, South Korean won and Chinese yuan, with a slight bump Wednesday doing little to recover its latest losses.

Observers said unease about Trump's latest tariff outbursts, including threats against European nations over their opposition to his Greenland grab and a warning to Canada over its trade talks with China, have also dented faith in US assets and weighed on the unit.

Meanwhile, US consumer confidence plunged to its lowest level since 2014, a survey showed, as households fret about inflation and the elevated cost of living.

Win Thin, at Bank of Nassau 1982 Ltd, said: "Foreign exchange typically is the leader in terms of showing market discomfort with a country's policies and economic outlook, so this dollar weakness bears watching."

Equity markets were mixed in Asia, after the S&P 500 clocked another record high thanks to a surge in tech titans including Apple, Microsoft and Amazon.

That helped Seoul to be among the best performers again -- hitting another all-time peak -- as chipmakers Samsung and SK hynix rallied.

There were also healthy gains in Hong Kong, Shanghai, Taipei and Jakarta, though Tokyo, Sydney, Singapore, Wellington and Manila eased.

Traders are keeping a close watch on earnings this week from some of Wall Street's Magnificent Seven, with Microsoft, Meta, Tesla and Apple all reporting.

"These results will provide critical insights into the trajectory of the artificial intelligence trade," wrote Tony Sycamore, market analyst at IG.

"After losing momentum in the final months of 2025 due to growing scrutiny over return on investment, capital expenditure and real-world constraints, the market is eager to see if the AI narrative can regain traction in 2026.

"Forward guidance will be key, alongside scrutiny of margins and capex projections."

In company news, tech investment titan SoftBank jumped almost six percent after the Wall Street Journal reported it was in talks to pump an additional $30 billion into ChatGPT developer OpenAI.

That comes after it invested $22.5 billion last month for an 11 percent stake.

- Key figures at around 0230 GMT -

Tokyo - Nikkei 225: DOWN 0.6 percent at 53,029.97 (break)

Hong Kong - Hang Seng Index: UP 1.5 percent at 27,541.71

Shanghai - Composite: UP 0.2 percent at 4,146.08

Dollar/yen: UP at 152.89 yen from 152.32 yen on Tuesday

Euro/dollar: DOWN at $1.2000 from $1.2035

Pound/dollar: DOWN at $1.3808 from $1.3833

Euro/pound: DOWN at 86.90 pence from 86.98 pence

West Texas Intermediate: UP 0.2 percent at $62.52 per barrel

Brent North Sea Crude: UP 0.1 percent at $67.62 per barrel

New York - Dow: DOWN 0.8 percent at 49,003.41 (close)

London - FTSE 100: UP 0.6 percent at 10,207.80 (close)

N.Schaad--VB