FOREX-Bruised dollar turns higher against euro, yen from oversold levels

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Dollar gains against euro, yen

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Greenback benefits from oversold technical levels

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Traders remain nervous over erratic tariff implementation

(Updated in New York morning time)

By Karen Brettell

NEW YORK, April 14 (Reuters) - The dollar turned higher against the Japanese yen and euro on Monday after a bruising week last week sent it to a three-year low against the single currency but also left it oversold by some technical metrics.

Investors remain wary on the greenback as U.S. President Donald Trump's erratic implementation of tariffs damages confidence in the world's reserve currency.

The dollar has decoupled from U.S. Treasury yields, which last week rose even as the dollar fell. That has raised speculation that investors are moving investments out of the country as they worry about the longevity and impact of trade levies.

"The policy-making is so chaotic that it's tough to think beyond the next 24 hours in terms of where the policy rates might be or where the economy is headed," said Adam Button, chief currency analyst at ForexLive.

"The uncertainty is now at an intolerable level for most businesses in international trade and the question is how quickly that hits the consumer in the real economy. Right now, the market is taking a dim view on future U.S. growth and that has come through most clearly in the currency market," Button said.

The euro was last down 0.26% at $1.1331. It reached $1.1473 on Friday, the highest since February 2022.

Against the Japanese yen, the dollar strengthened 0.08% to 143.61. It fell to 142.05 on Friday, the lowest since September.

The dollar underwent a four standard-deviation decline over the past week, Bilal Hafeez, CEO at Macro Hive, said on Monday in a note. "Normally, this would point to a likely rebound. But if we are witnessing a structural regime change, similar to the early 1970s breakdown of Bretton Woods, then all bets are off."

Trump on Sunday said he would be announcing the tariff rate on imported semiconductors over the next week, adding that there would be flexibility with some companies in the sector.

The White House on Friday granted an exclusion from steep tariffs for smartphones, computers and certain other electronics imported largely from China. U.S. Commerce Secretary Howard Lutnick said on Sunday, however, that they would face separate new duties along with semiconductors within the next two months.

"Markets right now are trading the uncertainty, and that has not been helped over the weekend by the contradictory stories coming out of the U.S. administration," said Nick Rees, head of macro research at Monex Europe.

"That really skews risks for the time being towards further dollar weakness as markets try to avoid some of this uncertainty by hiding basically anywhere that isn't in the U.S."

Japanese Prime Minister Shigeru Ishiba said on Monday his country does not plan to make big concessions and won't rush to reach a deal in upcoming tariff negotiations with Trump's administration.

Japanese Economy Minister Ryosei Akazawa said on Monday that foreign exchange issues would be dealt with between Finance Minister Katsunobu Kato and U.S. Treasury Secretary Scott Bessent.

"Markets jumped the gun on pricing in further yen strength on confirmation that Bessent and Kato will discuss FX," said Christopher Wong, a currency strategist at OCBC.

Against the Swiss franc, the dollar strengthened 1.07% to 0.824 francs.

Sterling gained 0.61% to $1.3159. The Australian dollar was up 0.16% at $0.6295, extending its more than 4% gain from last week.

The offshore yuan fell 0.42% to 7.312 per dollar. It struck a record low last week as the trade war between the United States and China intensified.

Data on Monday showed China's exports rose sharply in March after factories rushed out shipments before the latest U.S. tariffs took effect.

In cryptocurrencies, bitcoin gained 1.17% to $84,461. (Reporting by Karen Brettell. Additional reporting by Rae Wee in Singapore and Yadarisa Shabong in Bengaluru. Editing by Saad Sayeed, Chizu Nomiyama and Mark Potter)