FX.co ★ Dollar Edges Higher on Trade Optimism

The dollar index experienced an upswing, reaching approximately 99.8, marking its third consecutive session of gains as optimism surrounding global trade negotiations uplifted investor sentiment. Market participants became increasingly hopeful that tariff pressures might have reached their peak under President Donald Trump, following his comments on Wednesday. He hinted at potential trade agreements with India, Japan, and South Korea and conveyed confidence in reaching a deal with China. This upward movement occurred despite new data indicating that the US economy experienced an unexpected contraction of 0.3% on an annualized basis in the first quarter—the first negative growth in three years. This decline was attributed to a surge in imports and a notable slowdown in consumer spending. As markets now shift their focus to forthcoming economic indicators, including jobless claims and the ISM manufacturing survey slated for Thursday, followed by the release of the April jobs report on Friday, investors are evaluating the chances of a broader economic downturn. The dollar achieved its most significant gains against the euro, sterling, and yen.