US-China Tariff Pause Boosts Dollar, Eases Global Trade Tensions

The U.S. dollar maintained most of its gains following a new U.S.-China tariff deal that paused reciprocal tariffs for 90 days and lowered them significantly, which eased fears of a global recession and boosted global markets. The dollar index hovered near a one-month high around 101.6, supported by optimism from the trade breakthrough and expectations of reduced Federal Reserve rate cuts. Major currencies such as the euro and yen lost ground against the dollar, while regional currencies like the Chinese yuan, Australian dollar, and New Zealand dollar strengthened. Stock markets also rallied, with U.S. futures and European equities rising notably, reflecting improved risk sentiment. Investors are now focused on upcoming U.S. inflation data, which will influence the Federal Reserve's future monetary policy decisions amid the evolving trade outlook. The agreement signaled a potential shift in U.S. trade policy sensitivity under President Trump, with further negotiations planned to establish a broader trade agreement.