Sunday, 14 September 2025
Jakarta
--:--
Tokyo
--:--
Hongkong
--:--
New York
--:--
Dollar holds gains, yuan jumps from US-China trade pact
Tuesday, 13 May 2025 16:19 WIB | US DOLLAR |DOLLAR

The dollar retreated slightly on Tuesday but held on to most of the previous session's gains on lingering optimism over a tariff deal between the United States and China, which tapped the brakes on a trade war between the world's two largest economies.

Washington and Beijing on Monday announced an agreement to slash the massive tariffs they had imposed on each other for 90 days, sparking a relief rally across markets that swept up global stocks and sent the dollar surging.

The situation is still very dollar-centric according to Kit Juckes, chief FX strategist at Societe Generale, who said the dollar's rally on positive sentiment from U.S.-China talks was helped by the short-term positioning in the currency being squeezed out a little bit.

"Looking at it today, we're bouncing back. It's a little bit quieter."

Versus the Japanese yen, the dollar was down 0.45% at 147.82 yen, having rallied more than 2% on Monday. The euro rose 0.18% to $1.1107, after sliding 1.4% overnight.

The dollar fell 0.56% against the Swiss franc to 0.8405, reversing some of Monday's 1.6% jump. Sterling ticked up 0.22% to $1.3207.

Against a basket of currencies, the dollar hovered near a one-month high and was last at 101.57, but remains below its pre-April 2 tariff announcement levels. That announcement hurt the dollar, with analysts saying overseas investors had reduced their exposure to U.S. stocks and bonds.

"I think we will see a long-term trend where the dollar will weaken as people realize that we've over-invested in U.S. assets in a big way. And that's the sort of tectonic shift, if you like," Juckes said.

"The yuan is clearly the biggest currency beneficiary at the moment," Juckes added.

China's yuan scaled a six-month high, peaking at 7.1855 per dollar , which in turn lifted the Australian and New Zealand dollars.

The Aussie was up 0.55% to $0.6407 while the kiwi gained 0.50% to $0.5886. The two currencies are often used as liquid proxies for the yuan.

The de-escalation of U.S.-China trade tensions has in turn led traders to pare back bets of Federal Reserve rate cuts, on the view that policymakers would be under less pressure to ease monetary policy to support growth.

Futures show markets are now pricing in just about nearly 58 basis points of Fed cuts by December.

Data on U.S. inflation is due later on Tuesday, where expectations are for the core and headline number to have picked up on a monthly basis in April.

"We are in this period where the economic data is so far behind the changes that are happening. So I don't know how the market is going to react to them," Juckes said.

In cryptocurrencies, bitcoin last traded at $102,645, after surging to its highest since January 31 in the previous session.

Ether eased 1.2% to $2,456.17, but strayed not too far from a more than two-month high hit on Monday.

Source: Reuters

RELATED NEWS
US dollar rises on positioning moves, but outlook remains bearish...
Saturday, 13 September 2025 02:08 WIB

The U.S. dollar rose on Friday, a day after falling on a surge in U.S. jobless claims and modest inflation, as investors expected the Federal Reserve to cut interest rates next week after a roughly ni...

Jobless Claims Surge, Dollar on the Brink...
Friday, 12 September 2025 09:05 WIB

The US dollar weakened on Friday after a surge in jobless claims and a moderate rise in inflation made markets increasingly confident that the Fed would cut interest rates next week—and possibly furth...

Dollar Sideways, CPI Risks Ahead...
Thursday, 11 September 2025 08:24 WIB

The US dollar held steady early in the Asian session after the PPI data fell 0.1% in August, reinforcing expectations that the Fed would cut interest rates next week. The Dollar Index edged up to 97.8...

Dollar Strengthens as Geopolitics Heats Up; Investors Await US Inflation Data ...
Wednesday, 10 September 2025 15:56 WIB

The US dollar held steady on Wednesday (September 10th) ahead of US inflation data this week that could help shape the Federal Reserve's policy outlook, while tense geopolitical conditions supported c...

Dollar Steadies Ahead of Inflation Data...
Wednesday, 10 September 2025 09:35 WIB

The dollar index held around 97.8 on Wednesday after firming in the prior session, as investors awaited key inflation reports that could influence the Federal Reserve's policy stance. The producer pr...

LATEST NEWS
EUR/USD steadies as Fed rate cut bets firm amidst US labor market concerns

EUR/USD remains steady during the North American session on Friday, poised to end the week with modest gains of over 0.18% as traders brace for the next week's monetary policy decision by the Federal Reserve (Fed). At the time of writing, the pair...

Bessent met with BlackRock's Rieder as search for next Fed chair continues

U.S. Treasury Secretary Scott Bessent met with BlackRock Inc executive Rick Rieder in New York on Friday, as the Trump administration continued its search for a new chair for the Federal Reserve, a source familiar with the matter said. Bessent has...

Oil gains weighed down by US demand worries

Oil prices rose on Friday after a Ukrainian drone attack suspended loadings from the largest port in western Russia, but gains were capped by concerns about U.S. demand. Brent crude futures settled at $66.99 a barrel, up 62 cents, or 0.93%. U.S....

POPULAR NEWS
IMF says Fed has scope to lower interest rates
Friday, 12 September 2025 01:38 WIB

The International Monetary Fund on Thursday said the Federal Reserve has scope to lower interest rates because of the weakening U.S. labor market,...

Breaking News: US CPI Inflation Rises to 2.9% in August, Matching Forecasts
Thursday, 11 September 2025 19:44 WIB

Annual inflation in the United States (US), as measured by changes in the Consumer Price Index (CPI), rose to 2.9% in August from 2.7% in July, the...

Michigan Consumer Sentiment Index Expected to Weaken Further in September
Friday, 12 September 2025 19:39 WIB

The University of Michigan (UoM) is expected to release the preliminary reading of its monthly Consumer Confidence Index for September on Friday....

Asia-Pacific markets trade higher, tracking Wall Street gains
Friday, 12 September 2025 07:36 WIB

Asia-Pacific markets traded higher, tracking Wall Street gains overnight. Japan's benchmark Nikkei 225 rose 0.41% after hitting a fresh record high...