FX.co ★ Dollar Pressured by US-China Trade Uncertainty

The dollar index remained near 99 on Tuesday following a sharp decline the previous day, influenced by increasing uncertainty surrounding US-China trade relations. China clarified that it is not currently engaged in trade negotiations with the US, dismissing President Xi Jinping's alleged phone conversation with President Donald Trump—a claim made by Trump in a recent Time interview. In parallel, US Treasury Secretary Scott Bessent emphasized that the onus is on China to reduce trade tensions, pointing out that China's exports to the US far exceed its imports. Looking forward, investors are closely watching critical economic data releases, including the GDP figures for the first quarter and the Federal Reserve’s preferred PCE inflation measure on Wednesday, in addition to the April jobs report on Friday, to gauge potential shifts in the Federal Reserve's policy direction. Indications of easing economic performance could heighten expectations for the Federal Reserve's interest rate cuts sooner rather than later.