FOREX-Dollar treads water as Trump tariff clarity, central banks awaited

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Trump's mooted levies so far viewed as moderate

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Bank of Japan poised to raise interest rates on Friday

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Fed, ECB set policy next week

By Kevin Buckland

TOKYO, Jan 23 (Reuters) - The dollar steadied against major peers on Thursday, continuing its near paralysis of the past two days before more concrete announcements on tariffs from U.S. President Donald Trump.

A spate of central bank policy decisions are also due over the next week, with the Bank of Japan widely expected to raise interest rates at the end of a two-day meeting on Friday.

Rate decisions from the U.S. Federal Reserve and European Central Bank are scheduled for Wednesday and Thursday of next week, respectively.

The dollar index - which measures the currency versus six top rivals, including the euro and yen - was flat at 108.25, following two days of gains of around 0.1%.

On Monday, it tumbled 1.2%, its steepest one-day slide since November 2023, as Trump's first day in office brought a barrage of executive orders, but none on tariffs.

So far this week, Trump has mooted levies of around 25% on Canada and Mexico and 10% on China from Feb. 1. He also promised duties on European imports, without giving details.

"President Trump has so far taken a less hostile-than-expected approach to China," amid overall "softer-than-expected policies and tone on tariffs", said Carol Kong, a currency strategist at Commonwealth Bank of Australia.

At the same time, "we are cautious (that) risk sentiment remains fragile and can quickly turn sour if President Trump strikes a more aggressive tone."

The Chinese yuan was little changed at 7.2812 per dollar in offshore trading.

Japan's yen edged up about 0.1% to 156.40 with markets pricing 95% odds of a quarter-point hike on Friday.

The euro was flat at $1.0411. The ECB is widely expected to cut rates by a quarter point next week.

The Canadian dollar held steady at C$1.4386 against the greenback. The Bank of Canada is seen as likely to reduce rates by a quarter point next Wednesday.

The Mexican peso was little changed at 20.47 versus the U.S. currency.

(Reporting by Kevin Buckland; Editing by Jacqueline Wong)