US Dollar Index Strengthens On US-China Trade Deal Hopes
The US Dollar Index (DXY), a measure of the US Dollar (USD) against a basket of six major currencies, bounced back to around 99.25 during the early European session on Tuesday (10/06) amid improving risk sentiment. Investors will be closely monitoring the outcome of the US-China trade talks, which are set to resume in London on Tuesday.
The trade talks between the US and China began in London on Monday and are set to resume on Tuesday. The Trump administration has indicated it will remove restrictions on some technology exports in exchange for assurances that China eases restrictions on rare earth shipments, which are critical for a wide range of energy, defense and technology products.
US Treasury Secretary Scott Bessent described Monday’s discussions as a “good meeting.” Optimism over the easing of US-China trade tensions tempered concerns over an economic slowdown in the world’s two largest economies, which supported the greenback. The US Consumer Price Index (CPI) inflation data for May will be in focus on Wednesday. The report could provide some clues about the impact of tariffs and the outlook for interest rates. The headline CPI is expected to have risen by 2.5% YoY in May, while the core CPI is expected to have risen by 2.9% YoY in the same period. If the report shows a surprise lower inflation reading, it could drag the USD lower overall.
Source: FXStreet
