US Dollar Steady, Hopes for US-China Trade Peace Resist Pressure
The US Dollar Index (DXY) moved flat around 99.25 in early Asian trading on Tuesday. This stability stems from market hopes for a compromise in the trade war between the United States and China. US President Donald Trump's recent softening of his stance on Chinese import tariffs has helped ease tensions and provided some support for the dollar.
Previously, Trump had threatened to impose 100% tariffs on Chinese goods starting November 1. However, over the weekend, he reassured markets by stating that relations with Beijing "will be fine." US Treasury Secretary Scott Bessent also confirmed that Trump plans to meet Chinese President Xi Jinping in South Korea at the end of October, fueling hopes for an easing of the trade conflict between the two countries.
However, dovish comments from Federal Reserve officials have the potential to curb the dollar's strength. Fed official Anna Paulson has mentioned the possibility of additional interest rate cuts to support the labor market, given that trade tariffs appear to no longer be suppressing inflation as they once did. Markets now expect the Fed to almost certainly cut interest rates by 25 basis points at its October meeting, and again in December.
On the other hand, the US government shutdown, which is entering its third week without any certainty, is also weighing on market sentiment. If this deadlock continues, investors worry that the impact on the US economy will be even greater. This situation could put further pressure on the Dollar Index, although for now the dollar is still holding above the psychological level of 99.00. (asd)
Source: Newsmaker.id
