By Kevin Buckland and Johann M Cherian

U.S. dollar banknotes are seen in this illustration taken May 4, 2025. REUTERS

(Reuters) - The U.S. dollar wobbled close to multi-year lows against major currency peers on Monday, with traders alert for any trade-related headlines in the countdown to President Donald Trump's tariff deadline.

Most U.S. trade partners are set to see much steeper duties at the end of the 90-day moratorium on Trump's "Liberation Day" reciprocal tariffs on Wednesday. Trump clarified on Sunday that the new rates would take effect from August 1.

Trump said his administration was close to finalising several trade deals in the coming days but he will also name some dozen countries later on Monday that are receiving letters with their new, higher levies.

Trump also threatened to slap an additional 10% tariff on nations aligning with the "anti-American" policies of the BRICS emerging economies.

So far, only Britain, China and Vietnam have agreed any sort of trade deal with the Trump administration.

The tariff uncertainty weighed in particular on the risk-sensitive Australian and New Zealand dollars, ahead of monetary policy decisions in both countries in the coming two days.

"Market volatility appears inevitable when the pause officially ends and new tariff levels are announced," James Kniveton, a senior corporate FX dealer at Convera, wrote in a client note.

At the same time, "the impact may prove more muted this time," he said. "Unlike previous announcements where tariff levels exceeded expectations, current proposals are largely anticipated. Moreover, markets appear to be pricing in continued deadline extensions."

Options data also reflected that currency markets were pricing in limited volatility resurgence ahead of the tariff deadline on expectations that there could be further extensions.

The dollar was flat at 0.7959 Swiss franc on Monday, edging back towards the July 1 low of 0.7869 franc, a level not seen since January 2015.

The euro slipped 0.3% to $1.1750, while the dollar firmed 0.38% to 145.15 yen , reversing an earlier decline.

Despite multiple rounds of negotiations, progress on agreements with Japan and the European Union has been slow and markets are concerned that Tokyo and Brussels might not be able to secure deals with Washington ahead of the deadline.

The dollar index , which measures the currency against six major counterparts, edged up 0.26% to 97.223, but was close to last week's nearly 3-1/2-year trough of 96.373.

The selloff in the currency this year has been a result of investors questioning the safe-haven status of the greenback and reassessing earlier expectations that the United States could be spared in the event of a global economic slowdown.

On Monday, sterling weakened 0.3% to $1.36, but was still relatively close to the July 1 top of $1.3787, the strongest level since October 2021.

The Aussie dollar lost 0.7% to $0.6507, sliding further from July 1's near-eight-month high of $0.6590.

The Reserve Bank of Australia is widely expected to cut the cash rate by another quarter point on Tuesday amid a cooling in inflation and an uncertain growth outlook.

"These factors, combined with ongoing concerns around tariffs and trade, have negated any concerns that the RBA may have held about a tight labour market," IG analyst Tony Sycamore wrote in a client note.

"Forward guidance is expected to sound dovish, leaving the door open for further rate cuts into year-end."

The Reserve Bank of New Zealand, by contrast, is predicted by a majority of economists to hold rates steady on Wednesday, although one more quarter-point reduction is expected later this year.

The New Zealand dollar slipped 0.7% to $0.6008.

The U.S. dollar gained about 0.4% against both the Canadian dollar <CAD=D3> and the Mexican peso , to last stand at C$1.366 and 18.67 pesos.

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