By Rocky Swift
TOKYO, Jan 30 (Reuters) - The dollar was poised for a second straight weekly decline on Friday as tariff threats against countries trading with Cuba added to global tensions that have sapped demand for U.S. assets.
The White House said that President Donald Trump signed an executive order that would impose tariffs on countries that provide oil to Cuba, adding to recent geopolitical strains involving Iran, Venezuela, Greenland and Europe.
Reports that Trump is considering strikes against
Iran prompted a surge in oil prices and weighed on the dollar index (DXY).
The U.S. domestic front got a glimmer of hope from a deal in the Senate that would avert a partial government shutdown. In Japan, data showed inflation slowed in Tokyo but matched the central bank's target.
"The DXY continued its downward trend, as Trump's threats of military action in Iran added further pressure," Mantas Vanagas, a senior economist at Westpac Group, wrote in a note.
The dollar index, which measures the greenback against a basket of currencies, rose 0.2% to 96.35, trimming its weekly slide to 1.1%.
The euro lost 0.2% to $1.194. The yen weakened 0.17% to 153.39 per dollar. Sterling fell 0.1% to $1.3791.
The dollar hit a four-year low earlier in the week after Trump seemed to shrug off the currency's weakness, recovering slightly after Treasury Secretary Scott Bessent said that Washington has a strong-dollar policy.
Trump is weighing options against Iran that include targeted strikes on security forces and leaders to inspire protesters, multiple sources said. Trump has described the ships in the region as an "armada" sailing to Iran.
The greenback ended last week with its biggest fall since last April, driven partly by concerns about U.S. policy over Greenland.
The dollar found some support after the Federal Reserve held interest rates steady on Wednesday against the backdrop of what U.S. central bank chief Jerome Powell described as a solid economy and diminished risks to both inflation and employment.
The dollar slide has provided some reprieve for the battered yen. The Japanese currency has tracked around the 152 to 154 per dollar range for most of this week thanks to talk of rate checks from the U.S. and Japan last week - a move often seen as a precursor to intervention.
Core consumer prices in Tokyo rose 2% in January from a year earlier, data showed on Friday, slowing from the previous month but matching the central bank's target.
The Australian dollar weakened 0.2% versus the greenback to $0.7033. The kiwi fell 0.2% to $0.6066.
In cryptocurrencies, bitcoin fell 0.1% to $84,309.27, and ether declined 0.3% to $2,808.19.
(Reporting by Rocky Swift in Tokyo; Editing by Sam Holmes)
