The US dollar experienced a volatile week, initially pressured by dovish comments from a Fed official before rebounding sharply on renewed optimism surrounding international trade negotiations. President Trump’s reaffirmation of ongoing trade talks with China, despite denials from Beijing, provided a significant boost, as did signs of progress in discussions with Japan and South Korea. The dollar also benefited from easing investor concerns regarding the leadership of the Federal Reserve.
- The US Dollar Index climbed above 99.5.
- President Trump reaffirmed ongoing trade negotiations with China.
- The US dollar found support amid progress in trade talks with Japan and South Korea.
- Treasury Secretary Bessent emphasized the need for significant tariff reductions between the US and China.
- Trump softened his stance on Fed Chair Powell.
- Cleveland Fed President Beth Hammack suggested a potential rate cut in June if justified by economic data.
The dollar’s strength appears to be heavily reliant on positive developments in international trade relations. While comments from the Federal Reserve can create short-term fluctuations, the overriding factor influencing the dollar’s value seems to be the progress, or lack thereof, in resolving trade disputes with major economic partners. Any setbacks in these negotiations could quickly reverse the dollar’s recent gains.