TOKYO: The dollar climbed in early Asian trade on Monday after weekend talks between the United States and China eased concerns of a trade war between the world’s two biggest economies while global hot spots appeared to cool.
The greenback, Treasuries and equities have taken a beating since sweeping tariffs announced by U.S. President Donald Trump last month shook confidence in American assets. After talks in Geneva, Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer on Sunday said a deal had been reached with China to cut the U.S. trade deficit.
Further details are expected on Monday. Eyes will also be on U.S. earnings and data this week, including consumer price index (CPI) figures on Tuesday, for indications of how the trade spat has impacted the economy and expectations for rate hikes by the U.S. Federal Reserve.
“I suspect that talk of the demise of the U.S. dollar as a reserve currency is premature and that we’ll see a more normal trading pattern resume once we have some clarity around global trade,” said Michael McCarthy, chief executive officer of online trading platform Moomoo Australia.
“U.S. inflation data is obviously going to be very important, and for the Aussie we’ll be looking at the unemployment data this week, but I think it’s trade talks that are very likely to dominate market action,” he added.
India and Pakistan announced a ceasefire over the weekend following the four days of fighting between the nuclear powers that had rattled markets. And Ukrainian President Volodymyr Zelenskiy said he was ready to meet Russian leader Vladimir Putin in Turkey on Thursday for direct talks, the first since early months of the 2022 invasion.
Dollar eyes weekly rise into US-China trade talks
Tuesday’s U.S. CPI reading for last month will give a fresh read on inflation trends, while April retail sales on Thursday offer the latest window into consumer spending. Jobs data is also expected on Thursday for the U.S. and Australia.
The U.S. currency climbed 0.6% to 146.19 yen .
The dollar index added 0.1%, hovering near a one-month high.
The gauge is still down 3.5% from the April 2 announcement of Trump’s “Liberation Day” tariffs.
New Zealand’s kiwi dollar, a common proxy for risk assets, advanced 0.3% to $0.5924. The Australian dollar fetched $0.6425 , up 0.2%.
The euro stood at $1.1224 , down 0.2%. Sterling slid 0.3% to $1.3277 .
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