US Dollar Gains from Trade War Developments

The US dollar continues its upward trajectory, buoyed by optimism surrounding a potential breakthrough in the ongoing trade dispute between Washington and Beijing, which has escalated into a full-fledged trade war. This positive sentiment stems from encouraging developments in trade tensions reported on Tuesday.

US trade officials expressed confidence in achieving “significant progress” in bilateral talks aimed at securing a trade agreement with India. These discussions, led by US Vice President Vance and Indian Prime Minister Modi, have bolstered market optimism.

Risk appetite also improved following a pause in President Donald Trump’s criticism of Jerome Powell, the Federal Reserve Chairman. Trump’s recent attacks had driven market sentiment to a low point in recent days, and this reprieve has contributed to a more positive outlook.

US Treasury Secretary Scott Besant further fueled optimism on Tuesday by predicting that the trade war, initiated by President Trump, would see a de-escalation “very soon.” This statement sparked a wave of positive sentiment across financial markets.

According to a report published by The Wall Street Journal, the United States is currently outlining conditions to be implemented in upcoming trade negotiations with the United Kingdom, signaling proactive efforts to address global trade dynamics.

Reflecting this optimism, the US Dollar Index, which measures the currency’s performance against a basket of major currencies, climbed to 99.73 points, up from the previous daily close of 98.92 points. During the trading session, the index fluctuated, reaching a low of 98.86 points and a high of 99.80 points.