The dollar fell on Thursday after President Donald Trump said the U.S. would put additional tariffs on China.
The president said additional tariffs of 10% on the remaining $300 billion in Chinese goods would be added in September.
The dollar index fell 0.18% to 98.34.
Earlier, the dollar was stronger after the Federal Reserve sounded cautious on more rate cuts sent the euro to a 26-month low on Thursday, as investors decided a lengthy U.S. easing cycle was unlikely.
In a widely expected move, the U.S. central bank cut rates on Wednesday for the first time since the financial crisis, in response to the growing risk of higher import tariffs and a slowdown in the world's major economies. But it also signalled that the quarter point cut may not be the start of a lengthy campaign to shore up the economy.
"It's not the beginning of a long series of rate cuts," Fed Chairman Jerome Powell said after the Fed's decision, although he added, "I didn't say it's just one rate cut."
The Fed's less dovish than expected message triggered a rebound in the dollar, sending the dollar index to a 26-month high of 98.93 on Thursday.