The US Dollar Index (DXY), which measures the USD against six major currencies, continues to climb for the second consecutive day, trading near 99.60 during Monday’s Asian session. The rise in the US Dollar (USD) is attributed to signs of easing tensions between the US and China.
On Friday, China announced exemptions for certain US imports from its 125% tariffs, which sparked optimism that the prolonged trade war between the two largest economies might be nearing its resolution. However, a Chinese embassy spokesperson swiftly denied any ongoing tariff negotiations, insisting that “China and the US are not having any consultation or negotiation on tariffs,” and urged Washington to “stop creating confusion.”
Despite this, the yields on US two-year and 10-year Treasury notes remain subdued, standing at 3.75% and 4.24%, respectively, as investors brace for a busy week of economic data that may provide insights into the impact of President Donald Trump’s tariffs.
US Agriculture Secretary Brooke Rollins, in comments to Reuters on Sunday, stated that the Trump administration is holding daily discussions with China regarding tariffs, while emphasizing that trade agreements with other countries are close to being finalized.
At the same time, the Federal Reserve (Fed) is in a blackout period ahead of its May 7 Federal Open Market Committee (FOMC) meeting. Traders are closely monitoring key US economic reports set for release this week, including the preliminary Q1 GDP report, March PCE inflation data, and April jobs figures. These reports are expected to offer critical clues on the Fed’s next policy steps and the broader economic outlook.
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