Dollar rally unravels as investors shrug off Trump U-turns
The dollar staged a broad retreat on Thursday, as investor gloom over the lack of progress towards defusing the U.S.-China trade war reasserted itself following an interlude of optimism the previous day.
U.S. assets, including the dollar, rallied on Wednesday after U.S. President Donald Trump backed down from threats to fire the head of the Federal Reserve and appeared to soften his stance on China.
Treasury Secretary Scott Bessent said separately that the de facto embargo on U.S.-China trade was unsustainable, but that the U.S. would not move first in lowering its levies of more than 100% on Chinese goods.
By Thursday, those dollar gains had unravelled. China said there had been no negotiations on the economy and trade and it urged the U.S. to lift all unilateral tariff measures if it really wished to resolve the issue, leaving investors roughly where they were earlier in the week in terms of clarity.
The yen led the charge higher, leaving the dollar down 0.71% on the day at 142.395, but still above the 140-mark breached last week.
The Swiss franc , which is around its strongest against the dollar in more than a decade as a result of hefty safe-haven flows this month, rose, leaving the U.S. currency down 0.58% on the day at 0.82565 francs.
The pound rose 0.53% to $1.332. UK finance minister Rachel Reeves said on Thursday she was confident Britain could reach a trade deal with the United States.
Bitcoin tracked the dollar lower, falling 0.84% on the day to $92,896. Meanwhile, Trump's meme coin surged 33% overnight after the online promotion of a gala dinner with the president for the top 220 buyers of the $TRUMP coin. It is still only worth roughly a quarter of what it was at its launch in January.
Source: Reuters
