The U.S. dollar rebounded from an early selloff on Monday as investors speculated that Washington might ease its recent intensification of the trade conflict with Beijing. Meanwhile, political events in France and Japan exerted downward pressure on the euro and the yen. The dollar index, which gauges the strength of the greenback against a basket of six currencies, increased slightly to 99.002, recovering some of the losses incurred following U.S. President Trump’s announcement of 100% tariffs on China.
The announcement reignited concerns regarding Trump’s Liberation Day implementation of extensive tariffs in April, leading to a decline in both stock and cryptocurrency markets on Friday. “Certainly it’s pretty nervous out there,” stated Tim Kelleher. “If you analyze the U.S. and China situation, it appears that Trump has once again adopted a softer approach,” he noted, referencing a trading adage that “Trump always chickens out.” Earlier in the day, Trump stated: “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment,” he posted. “He doesn’t want a downturn for his country, and neither do I.”
Market liquidity could experience fluctuations due to holidays, as the U.S. recognizes Columbus Day/Indigenous Peoples’ Day today, and Japan is also closed in observance of Health and Sports Day. Against the yen, the dollar fetched 151.985 yen, reflecting an increase of 0.5% as markets evaluated the future direction for new Liberal Democratic Party leader Sanae Takaichi following Komeito’s exit from the ruling coalition on Friday, which posed a significant challenge to her aspirations of becoming the first female prime minister of the world’s fourth largest economy. The euro was recorded at $1.1609, reflecting a decrease of 0.1%, following the announcement from the French presidency regarding Prime Minister Sebastien Lecornu’s new cabinet line-up on Sunday, which included the reappointment of Roland Lescure, a close ally of Emmanuel Macron, as finance minister.
Cryptocurrency markets experienced volatility, oscillating between gains and losses following a significant selloff on Friday. Bitcoin was last observed trading up 0.4% at $115,486.04. Gold reached a new peak at $4,059.30, reflecting an increase of 0.8%. The offshore yuan was valued at 7.137 yuan per dollar, reflecting a 0.1% increase in early Asian trading sessions. The Australian dollar was valued at $0.6513, reflecting a 0.6% increase in early trading, whereas the kiwi was priced at $0.57345, showing a 0.3% rise. Sterling traded at $1.33415, reflecting a 0.1% increase thus far today.