The US dollar rose Monday after US President Donald Trump threatened to levy new tariffs on metal imports, prompting demand for the safe haven, while the euro retreated.

At 04:00 ET (09:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% higher to 108.140.

Dollar gains on trade war fears 

Concerns about a potential global trade war were raised Monday after President Trump said he will announce new 25% tariffs on all steel and aluminium imports into the US later on Monday.

The US president also said he will impose reciprocal tariffs on major trading partners.

Trump last week kicked off a trade war, first by imposing tariffs on Mexico and Canada and then pausing them, but sticking with duties on Chinese goods. 

China’s retaliatory duties on US goods are due to take effect later in the session.

“Needless to say, much uncertainty about the nature, timing and magnitude of these tariffs looks likely to keep the dollar supported this week,” said analysts at ING, in a note.

“The main threat to long dollar positions could be a re-assessment of European prospects should any expectations of a Russia-Ukraine ceasefire grow later this week. 

However, for the time being, we doubt investors will want to let go of overweight positions in the dollar and we can see DXY edging towards the top of a 108-109 trading range through the early part of this week.”

Beyond Trump, investor focus will be on US inflation data on Wednesday and an appearance by the Federal Reserve Chair Jerome Powell before the House of Representatives on Tuesday and Wednesday.