The dollar was little changed on Wednesday, with weak US confidence data and concerns about the impact of broad tariffs on US growth hampering a recent recovery.

The British market was in focus as Finance Minister Rachel Reeves is due to announce spending cuts later in the day, in a bid to show investors she can be trusted to fix public finances as growth falters.

After briefly dropping below 150 yen, the dollar hovered at 150.20 yen, but traders were less convinced, as a chaotic week of tariffs loomed.

The euro, which spent the week retreating from a five-month high, fell to $1.0776, a fresh three-week low. The Russian ruble rose 0.5% to 84.20 after the US struck a deal with Russia and Ukraine to halt attacks at sea and on energy targets, while wheat prices fell as the US said it would push for the lifting of sanctions on Russian agriculture.

That puts the focus on next week, when U.S. President Donald Trump has threatened to impose — or at least provide details of — a new round of tariffs on cars, chips and pharmaceuticals.

Sterling weakened after data showed British inflation slowed to an annualized rate of 2.8% in February from 3.0% in January, while markets awaited a budget update.

"The good news is that today's (inflation) data will give the Bank of England a path to continue its gradual easing of restrictive policy," said Sanjay Raja, chief UK economist at Deutsche Bank Research.

"We continue to think a May rate cut is more likely than not," he added.

The pound fell 0.4% to $1.2890. Money markets are fully pricing in a 25 bps BoE rate cut in August and an 80% chance of a move in June. They are also pricing in 44 bps in December, which implies an 80% chance of a second easing move of 25 bps by the end of the year. IRPR

"The narrative of tighter fiscal policy and looser monetary policy should be negative for sterling," said Chris Turner, head of FX strategy at ING.

"It seems the market is pricing in the BoE's easing cycle this year," he added, suggesting there could be as many as three interest rate cuts.

The trade-sensitive Australian dollar was above 63 cents, faltering only slightly when February consumer inflation data came in slightly lower than expected.

The Australian dollar barely reacted to Tuesday's federal budget, which promised tax cuts and extra borrowing to fund relief measures for voters ahead of a May general election. Tariffs and the threat of tariffs have prompted counterintuitive moves in currency markets as concerns that they could hurt U.S. growth have scuppered the assumption that the levies should be inflationary and boosted the dollar.

Data released on Tuesday showing U.S. consumer confidence plunged to its lowest level in more than four years in March highlighted how uncertainty is weighing heavily on households.

For the quarter, the dollar index - which had strengthened sharply between September and January - is headed for a decline of around 4%. The index last stalled at 104.28.

In emerging markets, Turkey's lira found footing just below 38 to the dollar after the finance minister and central bank governor told investors they would do whatever was necessary to tame market turmoil sparked by the arrest of President Tayyip Erdogan's main political rival.

Indonesia's currency lurched near a record low as concerns over slowing growth and rising government spending shook confidence in Southeast Asia's largest economy.

Source: Reuters