FX.co ★ Dollar Holds Gains from US-China Trade Breakthrough

The dollar index remained close to month-long peaks, hovering at approximately 101.6 on Tuesday, after experiencing a gain of over 1% in the preceding session. This upsurge followed an announcement that the United States and China had reached a provisional arrangement to reduce tariffs, thereby alleviating recession concerns. Following productive negotiations in Switzerland during the weekend, both Washington and Beijing concurred to decrease their tariffs to 30% and 10% respectively, for a 90-day timeframe. Treasury Secretary Scott Bessent outlined plans for further discussions with Chinese representatives in the forthcoming weeks, aiming to explore a more comprehensive trade agreement. The reduction in tariffs has instilled renewed confidence in the dollar, which had been under strain earlier in the year due to apprehensions that President Trump's trade policies were lessening the allure of American assets. Investors are now focused on the forthcoming consumer inflation report for insights into how the revised tariff conditions have impacted prices.