The US dollar held steady on Tuesday after President Donald Trump signaled a more conciliatory approach toward China, fueling optimism for a potential thaw in trade relations between the world’s two largest economies. Markets responded positively to signs that Washington and Beijing could be preparing for renewed dialogue, with investors cautiously hopeful about the possibility of a meeting between Trump and Chinese President Xi Jinping.
The dollar index — which tracks the performance of the US currency against a basket of major peers — inched up 0.04 percent to 99.34 points, reflecting a modest recovery in market confidence after weeks of volatility. Traders interpreted Trump’s softened rhetoric as an indication that further tariff hikes may be delayed or reconsidered, easing fears of an escalating trade conflict that had weighed heavily on global markets.
In currency trading, the euro remained under pressure, holding below the USD 1.16 mark to trade at USD 1.1566. The British pound slipped 0.06 percent to USD 1.3328 as investors assessed the latest economic data and awaited new guidance from the Bank of England.
Elsewhere, the New Zealand dollar continued its decline, reaching a six-month low of USD 0.57145 amid concerns over slowing global demand and weaker commodity prices. The Australian dollar was little changed, trading at USD 0.6516, supported by stable iron ore prices and expectations of steady monetary policy from the Reserve Bank of Australia.
The Japanese yen weakened 0.2 percent to 152.57 per dollar, reflecting a continued preference for the greenback as investors adjusted portfolios in response to shifting trade expectations and relative interest rate outlooks.
Analysts noted that Trump’s remarks marked a significant shift in tone after months of escalating tariff threats and sharp exchanges between Washington and Beijing. “Markets are reacting to the possibility that trade tensions might ease, which has provided some support to the dollar and risk-sensitive assets,” said one currency strategist in London.
While traders welcomed the apparent de-escalation, they cautioned that sentiment could remain fragile without concrete progress toward a formal meeting or trade agreement. For now, the dollar’s resilience reflects a combination of investor optimism and continued demand for safe-haven assets amid global economic uncertainty.
