US dollar outlook more subdued, but tariffs souring sentiment 

We're very much caught in a wait-and-see mode. While many have thrown in the towel on the dollar, we still believe we don't have the true ingredients for it to be going down very meaningfully over the next six to 12 months,

Mackel added

There has been a certain degree of fatigue in trying to navigate U.S. tariffs and their implication for currencies these last few months. Investors don't want to get caught in the trap of pre-positioning for an outcome where it's very unclear what that outcome will actually turn out to be,

said Paul Mackel, global head of FX research at HSBC

There are some tentative risks that the dollar’s safe haven status may be eroding,

said George Saravelos, global head of FX research at Deutsche Bank

If it is necessary, we have a strong plan to retaliate, and we will use it,

Ursula von der Leyen, the president of the European Commission, warned on Tuesday