FOREX-Dollar firms as Trump tariff plan keeps traders on edge

*

Currencies largely subdued ahead of Trump's tariff reveal

*

Dollar up slightly, worries about darkening U.S. economic outlook persist

*

White House Rose Garden announcement scheduled for 2000 GMT

(Updates to Asia afternoon)

By Rae Wee

SINGAPORE, April 2 (Reuters) - The dollar firmed a touch and other currencies held in tight ranges on Wednesday as traders anxiously awaited details of U.S. President Donald Trump's tariff plans later in the day that could set the tone for markets in the near term.

The euro last bought $1.07875 while sterling fetched $1.2914, both easing slightly ahead of a White House Rose Garden announcement scheduled for 2000 GMT that will likely see the imposition of dramatic new duties that could upend the global trade system.

Trump has for weeks trumpeted April 2 as "Liberation Day", and White House spokeswoman Karoline Leavitt said reciprocal tariffs on countries that impose duties on U.S. goods would take effect immediately after Trump's announcement.

"Markets are going to be jittery ahead of the announcement," said Carol Kong, a currency strategist at Commonwealth Bank of Australia.

"Sentiment is going to be driven by any further tariff headlines and in turn that will drive currency moves ahead of the big announcement."

Against the yen, the dollar rose 0.19% to 149.92.

The Australian dollar was up 0.26% at $0.6295, while the New Zealand dollar gained 0.31% to $0.57185, with both recovering slightly from their falls at the start of the week.

Details about the size and scope of the latest trade barriers set to come into force remain unknown, but the Washington Post reported that Trump's aides are considering a plan that would raise duties on products by about 20% from nearly every country, rather than targeting certain countries or products.

"While a 20% blanket tariff rate would be theoretically seen as a net positive for the U.S. dollar, the market is most intently focused on whether tariffs accelerate the stagflation risk in the U.S. economy," said Chris Weston, head of research at Pepperstone.

Worries about the impact of an escalating global trade war on the world's largest economy and a slew of weaker-than-expected U.S. data have stoked recession fears and in turn undermined the dollar this year.

The dollar rose marginally against a basket of currencies to 104.28 on Wednesday, though that comes after the greenback clocked a 3.1% fall in March, its worst monthly performance since November 2022.

Data on Tuesday showed U.S. manufacturing contracted in March, while a measure of inflation at the factory gate jumped to the highest level in nearly three years amid rising anxiety over tariffs on imported goods.

"A front-running of tariffs and shift to minimize import exposure is driving up prices, while persistent uncertainty is crimping underlying demand and leaves manufacturers longing for clarity," said economists at Wells Fargo in a note.

Elsewhere, the Canadian dollar fell 0.1% to C$1.4311, while the Mexican peso eased slightly to 20.3610 per dollar.

Canadian Prime Minister Mark Carney spoke with Mexican President Claudia Sheinbaum on Tuesday about Canada's plan to "fight unjustified trade actions" by the United States, the prime minister's office said.

Bank of Japan Governor Kazuo Ueda meanwhile said on Wednesday that planned new U.S. tariffs could have a huge impact on world trade, warning of a possible hit to global growth. (Reporting by Rae Wee; Editing by Shri Navaratnam and Edwina Gibbs)