The Dollar Index is showing a bearish technical pattern, with two lower tops at 109.881 and 108.523 following a peak at 110.176. Lower bottoms at 106.969 and 106.566 reinforce this negative setup.

Should this formation hold, technical indicators suggest a potential move toward the December 6 low at 105.420, with extended downside into a key retracement zone between 105.167 and 103.984. The 200-day moving average at 104.926, nestled within this zone, represents a crucial support level. On the upside, the 50-day moving average at 108.046 continues to limit any bullish momentum.

Trump's announcement of new tariffs -- including duties on lumber, automobiles, pharmaceuticals, and semiconductors -- added to market uncertainty. The president indicated tariffs could rise "substantially" over the next year, with some potentially effective as early as April 2.

Trump also deepened geopolitical tensions by labeling Ukrainian President Volodymyr Zelenskiy a dictator, unsettling European officials. Meanwhile, his mixed signals on U.S.-China trade talks kept traders cautious, with no clear timeline for a visit by Chinese President Xi Jinping to the United States.

Currency analyst Michael Pfister noted Thursday's dollar weakness was more contained compared to previous tariff-related moves, suggesting markets might be gradually pricing in the risks of Trump's trade policies.