American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Business

Dollar gains weekly as markets pin hopes on US-China trade talks

by admin May 9, 2025
May 9, 2025
Dollar gains weekly as markets pin hopes on US-China trade talks

The US dollar appeared set to close the week with gains against most of its major counterparts on Friday, as a newly announced trade agreement between the United States and the United Kingdom fanned hopes for potential progress in the highly anticipated US-China trade negotiations scheduled for the weekend.

Simultaneously, diminishing expectations for imminent US interest rate cuts, following cautious remarks from the Federal Reserve, provided further support for the greenback.

Financial markets headed into the weekend with all eyes firmly fixed on the upcoming trade talks between Washington and Beijing, slated to begin Saturday in Switzerland.

The euro remained steady during Asian trading hours but was down approximately 0.6% for the week at $1.1217.

The Japanese yen also weakened against the dollar by about 0.7% over the week, touching a one-month low of 146.18 before stabilizing around 145.78.

Sterling, which had initially rallied on reports of an impending US-UK trade deal, relinquished those gains after the specifics of the agreement revealed a relatively limited scope.

The deal modestly expands agricultural access for both nations and lowers some prohibitive US duties on British car exports, but notably leaves the 10% baseline tariff in place.

The pound subsequently hit a three-week low of $1.3220 in early Friday trading.

Market analysts interpreted the dollar’s strength as a reflection of cautious optimism regarding broader trade resolutions.

“The market reaction of buying USD may reflect greater optimism that such tariff deals are doable,” noted Steve Englander, global head of G10 currency research at Standard Chartered, in a client note.

He added, “Trump’s dangling of the prospect of a trade détente with China may be adding to optimism that the global disruption from trade wars may not be as severe as markets have feared… For the time being, G10 markets would be relieved if US and China bilateral tariffs were rolled back, even if they remain well above January 19 levels.”

Reflecting a refreshed, albeit selective, appetite for risk, Bitcoin also saw a notable surge, pushing back above the $100,000 mark.

Focus on US-China dialogue

President Trump, while announcing the UK deal, stated he expects “substantive negotiations” between the US and China this weekend and indicated that the current high tariffs on Beijing (reportedly up to 145%) would likely be reduced.

Adding to the speculative buzz, the New York Post reported, citing unidentified sources, that the administration is considering a plan to slash tariffs on Chinese imports by more than half, though the White House dismissed this as mere speculation.

Central bank divergence and Fed’s cautious stance

Central bank actions this week were largely in line with expectations.

The Bank of England proceeded with an anticipated rate cut, while central banks in Sweden, Norway, and the United States opted to keep their policy rates on hold.

However, comments from Federal Reserve Chair Jerome Powell, particularly his emphasis on the prevailing level of economic uncertainty, significantly tempered market expectations for near-term US rate cuts.

Consequently, market pricing for a Fed rate cut in June has receded sharply, falling to around 17% from approximately 55% just a week ago.

This recalibration of Fed expectations has been a key factor underpinning the dollar’s recent strength.

Asian currency dynamics and other market moves

In contrast to its performance against G10 peers, the dollar registered declines against several Asian currencies this week, largely influenced by a surprising surge in the Taiwan dollar, which settled around 30 to the dollar after a volatile period, marking a gain of over 6% since the end of April.

The Singapore dollar also traded near decade highs.

The Hong Kong dollar, however, retreated from the strong end of its trading band following significant intervention by the Hong Kong Monetary Authority.

The Australian dollar was on track for its first weekly drop in a month, down 0.7% to $0.6391, with the New Zealand dollar also trading lower at $0.5892.

As the week draws to a close, the focus remains squarely on the high-stakes trade discussions in Switzerland, which have the potential to significantly shape market direction in the coming weeks.

The post Dollar gains weekly as markets pin hopes on US-China trade talks appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Geopolitical tensions jeopardise energy flows in India and Pakistan
next post
FTSE 100 shares to watch: Aviva, National Grid, Compass, Burberry

Related Posts

RYLD yields 12%, IWM 1.1%: which is the...

October 20, 2024

Hubspot stock price slowly forms a bullish pattern:...

December 22, 2024

Retailers shift their thinking on delivery as consumer...

July 25, 2024

Tesla transfers $760 million in bitcoin: what’s next...

October 16, 2024

Turning away: how Trump’s policies are sparking a...

March 26, 2025

Dogizen’s DOGIZ token to launch on Cetus: A...

February 9, 2025

Wayfair CEO likens home goods slowdown to 2008...

August 2, 2024

Inside China’s export control maze: how Beijing regulates...

April 24, 2025

Capital One-Discover merger could put a bigger squeeze...

February 22, 2024

Short ALLE: bearish breakout below 50 ema signals...

November 20, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Interview: Strategic location gives Brazil Potash cost advantage in domestic fertiliser market, says CEO Matt Simpson

      June 1, 2025
    • Canada’s Q1 GDP expands by 2.2%, driven by exports spike ahead of potential US tariffs

      June 1, 2025
    • President Trump to host farewell for Elon Musk as DOGE leader steps away

      June 1, 2025
    • UK’s digital banks face divergent fortunes: Starling stumbles, Monzo and Revolut soars

      June 1, 2025
    • Trump wants Apple to shift iPhone production from India to the US: here’s what it means

      May 18, 2025

    Categories

    • Business (2,992)
    • Investing (2,449)
    • Latest News (1,994)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved