The greenback plunged on Thursday, after giving up some gains. Markets dropped on Wednesday following Donald Trump's decision to increase tariffs on China, sparking concerns about a prolonged trade war and the potential slowdown in the US economy.

The dollar index that gauges the greenback versus its major pairs fell by 0.6% to 101.959, staying close to the lowest in six months, regardless a slight recovery overnight.

The U.S. dollar has dropped significantly due to increased uncertainty surrounding Trump's tariffs and their potential economic effects.

The growing trade war with China, marked by Trump’s unprecedented 125% tariff hike, poses ongoing economic challenges for the U.S., as China remains a key trading partner.

EUR/USD edged up by 0.8% higher to 1.1040, this was supported by the Trump administration's decision to suspend tariffs on the European Union as part of a broader strategy.

GBP/USD advanced by 0.4% to 1.2865, The dollar's weakness provided support, although the decline in UK government bonds could put major pressure on the currency.

USD/JPY edged down by 1% to 146.30, as the Japanese currency was bolstered by a stronger-than-expected producer inflation report for March, which led to high expectations of further interest rate hikes by BOJ.